0
A Functional Relationship of the form y=f(X1,X2 ....Xn) means there is systematic relationship between the dependent variable y and the independent variable X1,X2 ....Xn and there is unique value of y for any set of values of the independent variables. In many economic models, a special set of functional relationships called total, average, and marginal functions is used. such functions are involved in the theory of demand,cost,production and market structure.
Extracted from : Managerial Economics by: H. Craig Peterson, W.Chris Lewis, Sudhir K. Jain) for more detail refer this book
ASHRAF
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
If average total cost is greater than marginal cost average total cost must be increasing is the true or false?
true
What does marginal costs mean?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit
Why are profit maximize when marginal revenue is equal to marginal cost?
Profits are maximized when marginal costs equals marginal revenue because fixed costs are now spread over a larger amount of revenue. This means that total cost per unit declines and profits increase. Another way to say this is that this is the effect of scale. When marginal revenue equals marginal costs, in a growing revenue situation, you gain economies of scale and higher profits.
What is marginal cost?
This costing system categorizes cost according to their cost behavior and divides them into variable and fixed cost, this system uses a cost for each unit of output based purely on the variable cost. All fixed cost is regarded as times based and are therefore linked to accounting periods rather than units of output. This costing system categorizes cost according to their cost behavior and divides them into variable and fixed cost, this system uses a cost for each unit of output based purely on the variable cost. All fixed cost is regarded as times based and are therefore linked to accounting periods rather than units of output.
What is maginal cost?
Marginal cost is the increase or decrease in the total cost of a production run for making one additional unit of an item.
Relationship between Tota Product Marginal Product and Average Product?
Average Product = (Total Product) / (Labor) Marginal Product(2) = (Total Product)(2) - (Total Product)(1)
6 If the average total cost curve is falling what is necessarily true of the marginal cost curve If the average total cost curve is rising what is necessarily true of the marginal cost curve?
When average total cost curve is falling it is necessarily above the marginal cost curve. If the average total cost curve is rising, it is necessarily below the marginal cost curve.
When marginal cost is less than the average total cost the average total cost is falling why?
as a marginal cost is the cost of the next product produced, if this is less than average cost, when you continue to produce more products the lower marginal cost will have an affect on the average and cause it to fall.
When average product is highest Options Total product is maximum Marginal product is maximum Marginal product is zero Marginal product is negative?
Negative
How does a monopolistically competitive firm determine its profit-maximizing price?
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
Find the marginal and the average cost function for the following total cost function?
Find (i) the marginal and (2) the average cost functions for the following total cost function. Calculate them at Q = 4 and Q = 6.
If average total cost is greater than marginal cost average total cost must be increasing is the true or false?
true
If you have total cost and total benefit how do you get marginal cost and marginal benefit?
Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity
Does marginal cost curve always intersect the average cost curve at the average cost curve's lowest point?
When the marginal cost is below the average total costs or the average variable costs,then the AC would be declining.When marginal cost is above the average cost then the average cost would be increasing.Therefore the marginal cost should intersect with the average cost at the lowest point in order to pull the average cost upwards.
What is happening to average total costs when they equal marginal cost?
That is were u now got your total cost
Why average cost increase when marginal cost is increasing?
Marginal cost = derivative of (Total cost/Quantity) Where Total cost = fixed cost + variable cost Marginal cost = derivative (Variable cost/Quantity) (by definition, fixed costs do not vary with quantity produced) Average cost = Total cost/Quantity The rate of change of average cost is equivalent to its derivative. Thus, AC' = derivative(Total cost/Quantity) => derivative (Variable cost/Quantity) = MC. So, when MC is increasing, AC' is increasing. That is, when marginal cost increases, the rate of change of average cost must increase, so average cost is always increasing when marginal cost is increasing.
Relationship between marginal cost and average total cost?
The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.
