What is marginal cost?How is it related to average cost?
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he marginal cost of production is the change in total production cost that comes from making or producing one additional unit.
When the average cost declines, the marginal cost is less than the average cost. When the average cost increases, the marginal cost is greater than the average cost. When the average cost stays the same (is at a minimum or maximum), the marginal cost equals the average cost.
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Average and Marginal Cost. Marginal cost is the change in total cost when another unit is produced; average cost is the total cost divided by the number of goods produced.
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