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
Fixed input and variable input: A fixed input is that input whose quantity cannot be varied in the short-run when demand conditions require an increase or a decrease in produc

Illustrate and discuss the impliction of various market structures(competitive and non-competitive)

elasticity of demand

what is budget line?show the shift in the budget line

Question 1: (a) Using examples, explain how the theory of Purchasing Power Parity conforms to the Law of One Price. (b) According to you, how best does the Theory of Purchasing

how do oligopolistic market and monopolistic competition react to change in demand and supply ?

what is the significance of the Loucas critique in political economy?

What is Nancy’s lifetime income as a function of her level of schooling, S? 2. What is Nancy’s lifetime income if she gets no schooling? What is it if she goes to school for all 60

different types of production funtion and curve given by different economist

Explain the Human Development Index Introduced by the UN in 1990, the index take into account not only the goods and services formed but also the ability of a population to use