Asked by
Alyssa Wuang
on Nov 04, 2024
Verified
Average total cost of producing 100 units of output is $5. If the marginal cost of producing the 101st unit is $4, then average total cost of 101 units is less than $5.
Average Total Cost
The total cost of production (fixed and variable costs combined) divided by the total quantity of output produced.
Marginal Cost
The price of creating one more unit of a particular product or service.
- Put into practice the concept of marginal cost and assess its interrelation with average costs and total cost.
- Assess the dynamics between marginal cost and average cost curves and their intersections.
Verified Answer
CH
Learning Objectives
- Put into practice the concept of marginal cost and assess its interrelation with average costs and total cost.
- Assess the dynamics between marginal cost and average cost curves and their intersections.