Example on relationship between marginal and average cost, Managerial Economics

Assignment Help:

Q. Example on Relationship between marginal and average cost?

This relationship between marginal and average cost can easily be recalled with the aid of Fig. below. It can be seen from figure that so long as MC is below AC, average cost falls which is, MC pulls AC downwards. When MC is above AC, average cost rises, which is, MC pulls AC upwards. When MC equals AC, average cost remains constant, which is, MC pulls AC horizontally. Arrows show the direction of these pulls.

245_Example on Relationship between marginal and average cost.png

Average and marginal cost

It is to be noted that a rising MC curve also cuts AVC curve at its lowest point. Reason for this is exactly the same as that we have given above to elucidate why MC cuts AC at its minimum point.


Related Discussions:- Example on relationship between marginal and average cost

Per capita income and international comparisons, PER CAPITA INCOME AND INTE...

PER CAPITA INCOME AND INTERNATIONAL COMPARISONS Per capita income figures can also be used to compare the standards of living of different countries. Thus if the per capita in

Commercial banks, Commercial Banks A Commercial Bank is a financial in...

Commercial Banks A Commercial Bank is a financial institution which undertakes all kinds of ordinary banking business like accepting deposits, advancing loans and is a member

Total cost (tc), Total Cost (TC) This is the sum of fixed costs and va...

Total Cost (TC) This is the sum of fixed costs and variable costs i.e. TC = FC + VC.

Help, BU 5210 Final ...

BU 5210 Final Summer 2013 Economic Analysis

Theories associated with different market structures, Theories associated w...

Theories associated with different market structures A firms profit maximising output decisions take into account the market structure under that they operate. There are 4 type

Expected price per product, Airbus Boeing Deman...

Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0

Central bank functions-bank of issue , Bank of Issue The central bank ...

Bank of Issue The central bank enjoys the monopoly of bank note issue i.e. no bank other than the central bank is authorised by law to print currency notes. Printing of paper

Impact of inflation, THE IMPACT OF INFLATION Inflation has different e...

THE IMPACT OF INFLATION Inflation has different effects on different economic activities on both micro and macro levels.  Some of these problems are considered below: i.

What do you understand by equilibrium national income, a) What do you unde...

a) What do you understand by equilibrium National Income and to what extent is economic growth beneficial to an economy? b) Explain using both diagrams and mathematical tools,

What kind of price discrimination, Imagine an amusement park with a sole at...

Imagine an amusement park with a sole attraction: a roller coaster. For simplicity, the cost of providing a ride is zero. There is a single consumer with demand for rides on the ro

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd