Variable and total cost curve , Microeconomics

Assignment Help:

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 


Related Discussions:- Variable and total cost curve

Replacement demand, The total demand consists of: 1. New owner demand an...

The total demand consists of: 1. New owner demand and 2.A replacement demand The replacement demand tends to grow with the in the total stock with the consumers. Once a pe

Example of insurance - reducing risk, The Value of Title Insurance While Bu...

The Value of Title Insurance While Buying a House *  A Scenario: - Price of house is $200,000 - 5% chance that seller does not own house *  Risk neutral buyer would pa

Private returns versus social returns, Private Returns Versus Social Return...

Private Returns Versus Social Returns As there is subsidisation of education by the state in all countries (and a little higher subsidisation in developing countries) it happe

Risk and cost benefit analysis , COST benefit analysis Costs that ...

COST benefit analysis Costs that are applicable in the project and the benefits that are associated with it are as follows: Risk occurs at different levels. It takes pl

Cost functions for the electric power sector, Cost Functions for the Electr...

Cost Functions for the Electric Power Sector Scale Economies in the Electric Power Industry Average Cost of Production in Electric Power Industry * Findings -

Investment in flood control infrastructure - present value, 1. An investmen...

1. An investment in flood control infrastructure  today will generate $1,000,000 in benefits 10 years from today. Using a 3% discount rate what is the present value of these benefi

Disposable income, what is disposable income and its importance.

what is disposable income and its importance.

Evolutionary model , Normal 0 false false false EN-IN ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Equilibrium price and equilibrium quantity of cassette, The compact disk pl...

The compact disk player has literally revolutionized the recording industry with its state-of-the-artclarity, sound, durability, and the fact that it costs less than cassette tape

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