Marginal Costs & Average Costs

Question 1

if totoal costs are 10 when nothing being produed what doe this mean

Answer 1

FC of £10

Question 2

Average Cost (AC) equation

Answer 2

TC/Q

AFC+AVC

Question 3

Marginal meaning

Answer 3

extra

Question 4

Marginal Cost equation

Answer 4

change in TC/
change in quanitity

Question 5

in econ marginal calculations will always be

Answer 5

average equation just with changes in it

Question 6

describe AC shape

Answer 6

intially falls then starts to rise again
smile

Question 7

how does MC curve look

Answer 7

intially falls then rises sharply

Question 8

Marginal Costs and AC are the mirror reflectinos of

Answer 8

MP and AP
flipped in reverse

Question 9

MC AND AC are shaped like that due tot eh

Answer 9

LODR

Question 10

SPLIT THE MC into 2 why is side 1 shaped liek this

Answer 10

LP increases so MP increases
this is due to
specialisation of and between workers
underutilisation of Fixed FOP
therefore MC decrease

Question 11

when does LODR kick in

Answer 11

bottom point of MC curve (draw to show )

Question 12

Explain stage 2 of MC

Answer 12

LODR kicks in casue
LP decrease therefore MP decrease
due to
FIXED FOP becoming constraint on production so MC rise

Question 13

what logic do we use to describe the AC

Answer 13

same as MC