Marginal and Average Cost Assignment Help

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Explaining the meaning of marginal cost

When total cost sees a change, which again is responsible for change in produced quantities by an individual unit, it is called marginal cost.This includes cost in entirety, used in manufacture from production level.

Defining what average cost means

When a certain number of merchandises divide the entire production cost it is expressed as average cost.It can be also relayed as sum of both average fixed costs and average variable costs.

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Relationship between marginal cost and average cost

Explanation of marginal and average cost’s relationship is easily expressed in 4 pointers.

  • Average cost seems to be seeing a decline when average cost is found to be higher than marginal cost
  • Minimization or reduction in average cost can be seemed because of a specific quantity. That quantity is known as efficient scale.
  • Rise can be seen for average cost on a certain condition. It is basically seen when average cost is lesser than marginal cost
  • It is at efficient scale where the curves of average cost and marginal cost crosses each other

Properties related to cost curves

There are mainly 3 properties related to cost curves formed after the relationship between marginal cost and average cost. Although we have given a detailed explanation in marginal and average cost homework help manual, here is its summarized version.

  1. When shape of average total cost is considered, it is seen in U shape
  2. If the output quality sees a rise, you can see the curve of marginal cost to incline upwards
  3. On seeing at the curve of average total cost at minimum level, curve of both average cost and marginal cost crosses each other

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