Question

Explain the relationship in between marginal cost,average cost and total cost in short run

Answer 1

generally ac is u shaped. when AC decreases then mc decreases but mc is less than AC , again when quantitative output increases, Means ek aisa point aata h jaha AC and mc both ex dosre Ko intersect karte h, again output ko aur increase karne par jab AC increase hota h to mc usase v teji se increase karta h. agar total cost ki bat ki jaye to output keep badhne par TC continuous badhta jata h.