Purchase Solution

Marginal cost of inputs and average cost

Not what you're looking for?

Ask Custom Question

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?

Purchase this Solution

Solution Summary

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

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 ...

Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.