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

Law of conservation, Law of conservation of mass was proposed by Lavoisier ...

Law of conservation of mass was proposed by Lavoisier & verified by Landolt. According to Law of conservation of mass law Matter is neither created nor destroyed in the course of c

What do you meant by financialization, Q. What do you meant by Financializa...

Q. What do you meant by Financialization? Financialization: The trend under neoliberalism through that real production in the economy is accompanied by an increasing degree of

What functions include of money, The functions of money include; (1)  mediu...

The functions of money include; (1)  medium of exchange,  (2)  store of value, and (3)  a calculate of worth.  Due to money is acceptable as a form of payment for all commodities,

HCA586, how do cooperative and noncooperative games differ

how do cooperative and noncooperative games differ

Long run eq, The raspberry growing industry is a perfectly competitive indu...

The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 u

The supply curve , The Supply Curve  – The supply curve exhibits how mu...

The Supply Curve  – The supply curve exhibits how much of a good manufacturerss are willing to sell at a particular given price, holding constant  other factors that can aff

Detergent Cartel problem, 2) Proctor & Gamble (P&G) and the Lever Co. decid...

2) Proctor & Gamble (P&G) and the Lever Co. decide to form a laundry detergent cartel for future sales in Europe. Lever is more efficient than P&G. a)illustrate graphically how the

Purchasing power parity (ppp), Purchasing Power Parity (PPP): The exch...

Purchasing Power Parity (PPP): The exchange rate is determined by the relative purchasing power of currency withineach country.  For example, if a product X costs Rs. 100 in I

Policy orientation for private sector investment, Policy Orientation for Pr...

Policy Orientation for Private Sector Investment The policy perspective in the matter of funding is undergoing a steady transformation aimed at according an increasing role to

Money in an economic system, Money facilitates market activities and is ess...

Money facilitates market activities and is essential in complex market systems.  With money people can avoid the problems  associated with coincidence of wants.  Between, these pro

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