Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Relationship between AC, AVC, AFC and MC is elucidated graphically by drawing respective cost curves in Figure below. Behaviour of cost curves is elucidated below.
Figure: Marginal and Average Cost Curves
Because AFC is falling steadily as output increases, AFC curve is also falling steadily from left to right. Mathematically, AFC curve approaches both axes, which is, it gets very near to though never touches either axis. Because we are dividing the constant fixed cost by different levels of output, AFC curve is a rectangular hyperbola. This refers that if we multiply AFC at any point on AFC curve with corresponding quantity of output, we would always get the same total fixed cost. This property of the AFC curve demonstrates that TFC is constant throughout.
AVC curve falls initially, reaches a minimum and then rises as output increases. It falls slowly as the firm's output rises from zero to normal capacity level. Once normal capacity output is reached AVC curve rises sharply with the increase in output. This is due to the fact that use of more and more of the variable factors, say labour, will result in overcrowding and also to problems of organisation. Further, as the existing fixed factors are employed more intensively machines will breakdown more often. All these lead to sharp increase in AVC.
what is the definition
'' monopoly is good for consumer welfare" is this crrect
Consider an economy with two individuals. Individual 1 has (inverse) demand curve for a public good given by P1=60-2Q1, While individual 2 has (inverse) demand curve for the public
Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined
Types of Price Elasticity of demand a) Perfectly inelastic demand Demand is said to be perfectly inelastic if changes in price have no the quantity demanded so
CHARACTERISTICS OF MANAGERIAL ECONOMICS 1. Uses theory of firm: Managerial economics uses economic principles and conceptsthat are known as theory of Firm or 'Economics of the
Demand Schedule The law of demand can be explained through a demand schedule. A demand schedule is a series of quantities that consumers would like to buy per unit of time at d
Discuss the determinants of price elasticity of demand
what is international pricing method?
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
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd