Marginal and Average costs Flashcards
1
Q
Marginal Cost equation
A
MC = change in total cost/ change in average cost
2
Q
Average cost equation
A
AC = total cost / Quantity
average fixed cost + average variable cost
3
Q
what is marginal cost
A
marginal cost is the extra cost when producing one more unit of output
4
Q
MC curve looks like
A
Looks like a nike tick because of the law of diminishing returns
firstly there is increasing labour productivity and increasing marginal product because of specialisation between workers.
5
Q
A