Variable and total cost curve , Microeconomics

Variable and Total cost curve 

174_short run cost.png

 

* Consequently (from the table which is given):

- MC initially decreases with increasing returns 

  • 0 through 4 units of output

- MC increases with the decreasing returns

  • 5 through 11 units of output

    983_variable cost curve.png
  • 2412_variable cost curve1.png

*  The line drawn from origin to tangent of variable cost curve:

-  Its slope equals AVC

-  The slope of point on VC equals MC

-  Thus, MC = AVC at 7 units of output (point A)

*  Unit Costs

-  AFC continuously falls

-  When MC < AVC or MC < ATC, AVC and ATC decrease

-  When MC > AVC or MC > ATC, AVC & ATC increase

-  MC = AVC and ATC at the minimum AVC and ATC

-  Minimum AVC occurs at lower output than minimum ATC because of FC 

Posted Date: 10/12/2012 2:52:16 AM | Location : United States







Related Discussions:- Variable and total cost curve , Assignment Help, Ask Question on Variable and total cost curve , Get Answer, Expert's Help, Variable and total cost curve Discussions

Write discussion on Variable and total cost curve
Your posts are moderated
Related Questions
How base case NPV analysis is applied in financial risk management

what is the law of diminishing marginal product? explanation with the help of proper schedule and diagram.

Question 1: (a) Clearly illustrate the features of a perfectly competitive firm. (b) How would the same industry change if it were organized first as a competitive industr

a. Determine Australia’s market equilibrium for TV sets. i. (1) What are the equilibrium price and quantity?

What is the arc cross elasticity of demand between Stop decay''s toothbrush and Decay fighter''s toothbrush? What does this indicate about the relationship between the two products

Market equilibrium happens where supply equals demand (supply curve intersects demand curve).   An equilibrium implies that there is no force that will cause further changes in pri

#question.describing risk,preference towards risk, the demand for risky assest.

In relation to banking, Basel II, the Capital Requirements Directive (CRD) was implemented in January 2008. The CRD requires stricter capital treatment of a bank's risk transfer op

Question 1: (a) Using examples, explain the difference between time-series, cross-sectional, and panel data. (b) Formulate a simple linear equation, and carefully explain