Search results
Results from the WOW.Com Content Network
An increasing marginal cost curve intersects a U-shaped average cost curve at the latter's minimum, after which the average cost curve begins to slope upward. For further increases in production beyond this minimum, marginal cost is above average costs, so average costs are increasing as quantity increases.
Marginal cost (MC; crosses the minimum points of both the AC and AFC curves) In economics , average variable cost ( AVC ) is a firm's variable costs (VC; labour, electricity, etc.) divided by the quantity of output produced (Q): A V C = V C Q {\displaystyle AVC={\frac {VC}{Q}}}
Marginal cost (MC; crosses the minimum points of both the AC and AFC curves) In economics , average fixed cost ( AFC ) is the fixed costs of production (FC) divided by the quantity (Q) of output produced.
The total cost curve, if non-linear, can represent increasing and diminishing marginal returns.. The short-run total cost (SRTC) and long-run total cost (LRTC) curves are increasing in the quantity of output produced because producing more output requires more labor usage in both the short and long runs, and because in the long run producing more output involves using more of the physical ...
In economics, the marginal cost is the change in the total cost that arises when the quantity produced is increased, i.e. the cost of producing additional quantity. [1] In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount.
For a PC company, this equilibrium condition occurs where the perfectly elastic demand curve equals minimum average cost. An MC company's demand curve is not flat but is downward-sloping. Thus, the demand curve will be tangential to the long-run average cost curve at a point to the left of its minimum. The result is excess capacity. [22]
Get AOL Mail for FREE! Manage your email like never before with travel, photo & document views. Personalize your inbox with themes & tabs. You've Got Mail!
In perfect competition, any profit-maximizing producer faces a market price equal to its marginal cost (P = MC). This implies that a factor's price equals the factor's marginal revenue product. It allows for derivation of the supply curve on which the neoclassical approach is based. This is also the reason why a monopoly does