Marginal Cost

Related BrainMass Solutions

• Marginal Cost Curve in Firm's Supply Curve

  Note that the marginal cost may change with volume, and so at each level of production, the marginal cost is the cost of the next unit produced.

• The marginal cost curve

  When average total cost is rising (the average total cost curve is positively sloped), marginal cost is greater than average total cost. Focus on the marginal cost curve.

• Marginal & Average Cost Curve

  Answer (D): It is not necessarily true that if the marginal costs are increasing, the average cost curve is below the marginal cost. It takes some time for marginal cost to catch up with average cost.

• Externalities: A summary

  When there is a negative externality, the marginal social cost curve is above the private marginal cost curve. Typically, the private marginal cost curve is the market supply curve.

• Optimal Output for Short-Run Profit Maximization is Marginal Revenue = Marginal Cost

  On the other hand, if marginal cost exceeds marginal revenue, the firm will be selling units for less than they cost to make.

• Marginal costs

  Thus we can use marginal cost and marginal revenue to calculate the output level that maximizes profit. So long as marginal revenue exceeds marginal cost, increasing output.

• Marginal Cost

  If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c.

• Profits of a price taking firm

  Marginal cost is the change in total cost divided by the change in output. Marginal cost first declines, reflecting increasing marginal returns in the short run as more of the variable resource is employed.

• Analyze Cost and Role in Decision Making

  Marginal cost is the increment in the cost incurred as a result of an investment decision. The marginal cost may be computed by deducting the cost for the company without the project from the cost for the company with the project.

• Cost Curves

  D)If you know that marginal costs are increasing, is it necessarily true that the average cost curve is below marginal cost? E)Why does the average total cost curve always start above the marginal cost curve in the short run?