Define marginal cost. Explain its relations with average variable cost

1.	Define marginal cost. Explain its relations with average variable cost.
Answer» Solution :The COST added by producing one ADDITIONAL unit of a product or SERVICE. If the average cost falls due to an increase in the output, the marginal cost is LESS than the average cost. If the average cost rises due to an increase in the output, the marginal cost is more than the average cost. Marginal cost is EQUAL to the average cost when the marginal cost is minimum.

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