Tuesday, August 16, 2011
Is Marginal Cost = Average Variable Cost?
The marginal costs is the difference it cost to produce more products, since the fixed costs would not change, the difference would be the amount of variable costs it would take to produce the quanity greater than what the average output is. Example, it costs 5000 to produce 1000 products, but 5050 to produce 1100 products, the difference is 100 for the additional 50 products, although the average variable cost for each item might 1.00 which would be 100 for the 50 products, so no it is not the same as the average variable cost, merely the difference in the costs from production run a and production run b.
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