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InterviewSolution
| 1. |
Definecost. State the relation betweenmarginal cost and average variable cost. |
| Answer» <html><body><p></p>Solution :(i) Both <a href="https://interviewquestions.tuteehub.com/tag/avc-364692" style="font-weight:bold;" target="_blank" title="Click to know more about AVC">AVC</a> and MC curves are of U-shape. It shows <a href="https://interviewquestions.tuteehub.com/tag/law-184" style="font-weight:bold;" target="_blank" title="Click to know more about LAW">LAW</a> of variable portion.<br/> (<a href="https://interviewquestions.tuteehub.com/tag/ii-1036832" style="font-weight:bold;" target="_blank" title="Click to know more about II">II</a>) Minimum point of AVC curve will <a href="https://interviewquestions.tuteehub.com/tag/always-373607" style="font-weight:bold;" target="_blank" title="Click to know more about ALWAYS">ALWAYS</a> right to minimum point of MC.<br/> (iii) When AVC declines, then MC curve is below to AVC.<br/> (iv) When AVC increases, then MC curve will be above to AVC. (v) When AVC is <a href="https://interviewquestions.tuteehub.com/tag/constant-930172" style="font-weight:bold;" target="_blank" title="Click to know more about CONSTANT">CONSTANT</a>, then MC = AVC</body></html> | |