Question

state the relationship between AC and MC.​

Answer 1

Answer:

The relationship between MC and AC can be stated as under: (i) When AC falls with increase in output, MC is lower than AC, i.e., MC curve lies below the AC curve.Actually, MC rises earlier than AC. (ii) When AC rises with increase in output, MC is higher than AC, i.e., MC curve lies above the AC curve.

Answer 2

Concept:

Average total cost is the ratio of total cost to the output. Marginal cost is the ratio of change in total cost to the change in output.

Given:

State the relationship between AC and MC.​

To find:

State the relationship between AC and MC is to find out.

Solution:

When average cost falls then the marginal cost lies below the average total cost or marginal cost is less than the average cost. When average cost rise then the marginal cost lies above the average total cost or marginal cost is more than the average cost.