Cost considerations for managers, Microeconomics

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Some Cost Considerations for Managers

* Three guidelines for estimating the marginal cost(MC):
1) Average variable cost should not be used as substitute for the marginal cost(MC).

2) A single item on firm's accounting ledger can have two components, only one of which involves marginal cost(MC).

3) All opportunity cost should be included in determining the marginal cost(MC).

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