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| 1. |
Explainthe relationshipbetweenaverage variable cost and marginal cost with the help of a diagram. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> : Marginal cost (MC) is the cost of producing an extra unit of output. Review: Average variable cost (AVC) is the cost of labor <a href="https://interviewquestions.tuteehub.com/tag/per-590802" style="font-weight:bold;" target="_blank" title="Click to know more about PER">PER</a> unit of output produced. When MC is below AVC, MC <a href="https://interviewquestions.tuteehub.com/tag/pulls-1172384" style="font-weight:bold;" target="_blank" title="Click to know more about PULLS">PULLS</a> the average down. You should understand the exact relationship between marginal cost (MC) and average variable cost (AVC).</body></html> | |