Explain the relation between marginal cost and average cost. – InterviewSolution

1.	Explain the relation between marginal cost and average cost.
Answer» Relation between Marginal Cost and Average Cost (a) MC and AC both can be calculated by TC. (b) When AC falls, MC also falls but AC > MC. (c) When AC rises, MC also rises, but now MC > AC. (d) When AC is minimum, then MC = AC. In other words, MC curve cuts the AC curve at its minimum point (i.e. optimum point) and goes upwards.

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