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

Price elasticity of two parallel demand curves, It can be geometrically pro...

It can be geometrically proved that two elasticity are equal, which is., QB=RD Let's first consider ΔAOB. If we draw a horizontal line from point Q to intersect the vertical axis a

Define managerial economics according to mcnair and meriam, Define Manageri...

Define Managerial economics according to McNair and Meriam McNair and Meriam:  "Managerial economics comprises the use of economic modes of thought to analyse business situatio

Resource allocation in a free enterprise, Resource allocation in a free ent...

Resource allocation in a free enterprise Although there are no central committees organising the allocation of resources, there is supposed to be no chaos but order. The major

Methods of demand forecast, No demand forecasting method is 100% accurate. ...

No demand forecasting method is 100% accurate. Collective forecasts develop precision and reduce the probability of huge mistakes.  Methods which relay on Qualitative Assessmen

State the demand analysis, State the Demand analysis Analysis of dem...

State the Demand analysis Analysis of demand is assumed to forecast demand that is a basic component in managerial decision-making. Demand forecasting is of importance since

Point elasticity of demand, calculate point elasticity of demand for demand...

calculate point elasticity of demand for demand function q=10-2p for decrease in price from rs 3 to rs 2

State the application of managerial economics, APPLICATION OF MANAGERIAL EC...

APPLICATION OF MANAGERIAL ECONOMICS Tools of managerial economics can be used to accomplish virtually all the goals of a business organisation in an efficient manner. Typical m

Types of public debt, Types of Public Debt Public debts can be classif...

Types of Public Debt Public debts can be classified according to the purpose for which the money was borrowed into; a.           Reproductive Debt:  where a loan has been

Econ600, 250 word essay: A New Hampshire resort offers year-round activitie...

250 word essay: A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities; in the summer, golf, tennis, and hiking. The resort’s oper

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