Explore BrainMass

Explore BrainMass

    Marginal cost of inputs and average cost

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    If I increase the amount of pizza that I serve why will you experience diminishing returns?

    Why is the marginal cost of inputs more important than the average cost of inputs?

    © BrainMass Inc. brainmass.com December 24, 2021, 5:55 pm ad1c9bdddf
    https://brainmass.com/economics/utility/marginal-cost-of-inputs-and-average-cost-79622

    Solution Preview

    The increase in the amount of pizza beyond a certain point leads to the negative marginal utility. It means that the satisfaction derived from eating pizza becomes negative after eating certain number of pizza.
    This is based on the concept of utility. Utility is an abstract concept. Utility is the satisfaction that an individual gains from consuming a given amount of goods or services in an economy. The amount of a person's total ...

    Solution Summary

    This explains the relationship between Marginal cost of inputs and average cost

    $2.49

    ADVERTISEMENT