# Short-run marginal cost curve

Given the following table:

Complete the following table (round each answer to the nearest whole number):

Total Variable Fixed Marginal Average Avg. Var. Avg. Fixed

Output Cost Cost Cost Cost Cost Cost Cost

0

1 5

2 30

3 13

4 105 10

5 110

6 50

Complete the table then draw the following curves (on a single graph):

? Short-run average cost curve;

? Short-run marginal cost curve.

Use the information from the graphs to answer to the following questions:

1) At what level of output does average cost reach its minimum?

2) Over what range of output does diminishing returns occur?

3.Consider the following statements when answering this question

I. The marginal cost curve intersects the average total cost and average variable cost curves at their minimum values.

II. When a firm has positive fixed costs, the output level associated with minimum average variable costs is less than the output associated with minimum average total costs.

Choose the best alternative

a.I is true, and II is false.

b.I is false, and II is true.

c.I and II are both true.

d.I and II are both false.

**Please post the graph in a separate file.

https://brainmass.com/economics/pricing-output-decisions/short-run-marginal-cost-curve-311883

#### Solution Summary

Short-run marginal cost curve is analyzed.

Short-run marginal cost curves

1. If the government imposes a $1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a $100 per-firm tax?

2. a) Why are short-run marginal cost curves expected to slope upward?

b) If you know that average costs are increasing, is the marginal cost curve above or below the average cost curve?

c) If you know that marginal costs are increasing, is it necessarily true that the average cost curve is below marginal cost?

d) Why does the average total cost curve always start above the marginal cost curve in the short run?

e) If marginal cost is equal to average cost, what do you know about that point on the average cost curve? Why?