Define marginal cost. Explain its relation with average cost. - Vidyadip

Question

Define marginal cost. Explain its relation with average cost.

✓

Answer

MC is addition to total cost on producing one more unit of output.
When MC MC=AC, AC is constant.
MC>AC, AC rises.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "4 Marks Question" from Production and cost→Production and cost — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

Price of commodity A is $10$ per unit and Total Revenue at this price is ₹ $1600.$ When its price rises by $20\%$, Total Revenue increases by ₹ $800$. Calculate its Price Elasticity of Supply.

What would be an effect on equilibrium price and quantity when demand and supply both increase at the same rate?
OR
Explain with the help of a diagram a situation when demand and supply curves shift to the right but equilibrium price remains the same.
OR
Market for a good is in equilibrium. What is the effect on equilibrium price and quantity if both the market demand and the market supply of the goods increase in the same proportion? Use diagram.

When the price of a commodity falls from ₹ 10 per unit to 9 per unit, its quantity supplied falls by 20 percent.

Distinguish between increase in demand and increase in quantity demanded of a good.

“A good sample is generally based on correctness and continuity”. In the context of above statement explain the characteristics of good sample.

When the price of a commodity changes from ₹ $4$ per unit to ₹ $5$ per unit, its market supply rises from ₹ $100$ units to ₹ $120$ units. Calculate the price elasticity of supply. It supply elastic? Give reason.

There are three firms A, B and C in a market. The supply schedule for the market and that for firms A and B is given below. Prepare the supply schedule for firm C.

Price(₹)	Supply of Firm A	Supply of Firm B	Supply of Firm C	Market Supply $MS = S_A + S_B + S_C$
10	0	25	--	35
20	10	30	--	60
30	20	35	--	85
40	30	40	--	110
50	40	45	--	135
60	50	50	--	160

As a result of increase in price from $4$ to $5$, the quantity demanded decreases by $20\%.$ Comment on $PED$.

A seller sells 3 diamond rings of ₹ 15000 each. If a seller sells his 4th diamond ring, his MR becomes ₹ 13500. Calculate the price at which the seller sells his fourth ring.

What is market demand for a good? Name the factors determining market demand.