Question

Draw a rough sketch of cost ( C) , Average cost ( AC) and Marginal cost ( MC )​

Answer 1

Explained: Concepts of Cost (C), Average cost (AC), and Marginal cost (MC).

Explanation:

1. Cost: In economics, a cost curve is a graph that depicts production costs as a function of the total amount produced. In a free-market economy, a cost curve is the result of productively efficient firms optimizing their production process by minimizing costs commensurate with each potential level of production. Profit-maximizing businesses employ cost curves to calculate output amounts.
2. Average cost: In economics, average cost or unit cost = total cost (TC) divided by the number of units of a good produced (the output Q).

$AC=TC/Q$

• The average cost has a big influence on how much corporations charge for their products. The size of the market and how their competitors choose to operate are directly linked to the sales of specific commodities by businesses.

3. Marginal cost: The change in overall cost that occurs when the amount produced is raised, or the cost of producing more, is known as the marginal cost in economics.

• It can refer to the rate of change in total cost as output is increased by an infinitesimal amount, or it can refer to an increase in output of one unit.