Variable and Total cost curve 

 

* 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
  
  
• 

*  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

Ask an Expert

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

Write your message here..

Related Questions

OLIGOPOLY, EXPLAIN KINKED DEMAND CURVE EXPLAIN KINKED DEMAND CURVE

Indifference curves, why men and womens indifference curves are different why men and womens indifference curves are different

Economic policy efficiently, Economic policy efficiently: The reason f... Economic policy efficiently: The reason for poverty and misery in the developing countries is not essentially the lack of potentialities or resources, human or material, but t

Supply and demand model, The vast majority of corn and soybeans produced in... The vast majority of corn and soybeans produced in the United States is grown in the Midwestern states including: Nebraska, Iowa, Illinois, Indiana, and Ohio. This region experienc

Area of dominant influence (adi), Area of Dominant Influence (ADI) The... Area of Dominant Influence (ADI) The ADI is a geographic area made up of all over the world that receive signals from radio and television stations in a individual market.

Nature and scope of economics, explain the nature and scope of economics. explain the nature and scope of economics.

Illustrate marginal utility of the variable commodity , As a consumer incre... As a consumer increases the consumption of any one commodity, marginal utility of the variable commodity must eventually decline."Illustrate the statement. Illustrate law of dem

Types of inflation in a country, (a) Describe the different types of inflat... (a) Describe the different types of inflation in a country. (b) Describe the trade-off between inflation and unemployment, using appropriate diagrams. (c) Mauritius has bee

Pure competition and efficiency, Allocative efficiency criteria are satisfi... Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this ec

Policies of educational financing - earmarking, Policies of Educational Fin... Policies of Educational Financing - Earmarking Earmarking refers to setting aside and using the funds generated by a special cess/tax for the particular purpose for which it i