what does the marginal cost curve represent Marginal Cost Change in Total Expenses Change in Quantity of Units Produced The change in total expenses is the difference between the cost of manufacturing at one level
The marginal cost curve is the graphical representation of marginal cost also referred to as incremental cost as the number of units of production increases As it presents the cost of increasing one more unit of output at a range of different output rates the incremental cost curve is essential for calculating efficiency in a company The marginal cost curve is a U shaped curve It indicates that initially when the production starts the marginal cost is comparatively high as it reflects the total cost including fixed and variable costs In the initial stage the cost of production is high as it includes the cost of machines setting up a factory and other expenses
what does the marginal cost curve represent
what does the marginal cost curve represent
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Marginal Cost Formula And Calculation
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Marginal Cost is the cost of producing an extra unit It is the addition to Total Cost from selling one extra unit For example the marginal cost of producing the fifth unit of output is 13 The total cost of producing five units is 45 But for the marginal cost we find the change in total cost of producing the fifth unit Marginal cost is the change in total cost or total variable cost in response to a one unit change in output It equals the slope of the total cost curve function or the total variable cost curve As the slope of any function can be determined by finding its first derivative MC can also be defined as follows
Marginal cost MC is calculated by taking the change in total cost between two levels of output and dividing by the change in output The marginal cost curve is upward sloping Average variable cost obtained when variable cost is divided by quantity of output The marginal cost average variable cost and average total cost curves are derived from the total cost curve From figure 8 3 we can see that the marginal cost curve crosses both the average variable cost curve and the average fixed cost curve at their minimum points
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Figure 8 3 Shows A Firm s Marginal Cost Average Total Cost And
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Explore the relationship between marginal cost average variable cost average total cost and average fixed cost curves in economics See how to graph these curves and highlights their intersections which represent minimum points for average costs The average variable cost curve lies below the average total cost curve and is typically U shaped or upward sloping Marginal cost MC is calculated by taking the change in total cost between two levels of output and dividing by the change in output The marginal cost curve is upward sloping
Three Cost Curves Source Journal of Applied Mathematics Marginal Cost Formula The marginal cost formula requires three inputs Total Costs of Production Change in Costs Change in Quantity The first step is to calculate the total cost of production by calculating the sum of the total fixed costs and the total variable costs Marginal cost MC the cost of producing an extra unit of output Total variable cost TVC cost involved in producing more units which in this case is the cost of employing workers Average Variable Cost AVC Total variable cost quantity produced
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what does the marginal cost curve represent - The marginal cost average variable cost and average total cost curves are derived from the total cost curve From figure 8 3 we can see that the marginal cost curve crosses both the average variable cost curve and the average fixed cost curve at their minimum points