Where does the marginal cost curve intersect the average total cost and average variable cost curves?
lowest point
There is one point where the marginal cost curve and the average variable cost curve intersect. They intersect at the lowest point of the average variable cost curve. The marginal cost curve represents how much more the next unit costs than the previous unit.
Why does the marginal cost curve intersects both the average total cost and average variable cost curves at their minimum points?
The marginal cost curve always intersects the average total cost curve at its lowest point because the marginal cost of making the next unit of output will always affect the average total cost. As a result, so long as marginal cost is less than average total cost, average total cost will fall.
At which point does the marginal cost curve intersect the average variable cost curve and short run average total cost curve?
The marginal cost curve intersects both the average variable cost curve and (short-run) average total cost curve at their minimum points. When the marginal cost curve is above an average cost curve the average curve is rising.
What is the relationship between marginal cost curve and average variable cost curve?
When the marginal unit costs more than the average, the average has to increase. By definition, then, the MC curve intersects the AVC curve at the minimum point on the AVC curve. At the intersection, MC and AVC are equal. If you flip the AVC and MC curves over, they become APL and MP curves.
How to calculate short-run marginal cost?
tracking the cost to produce an item is important from the start.
Why is the marginal cost curve U-shaped?
The Marginal Costs curve is u-shaped because of changes in the productivity of inputs of production. In most cases, an increase in the use of variable inputs (workers for example) lead to an increase in productivity when starting from a ‘low’ base and a decrease in productivity when starting from a ‘high’ base.
Is it possible to derive variable cost from marginal cost?
No. You can’t derive variable cost from marginal cost. But you can derive total variable cost from marginal cost under the following situation: Now to derive TC from it we have to integrate over the MC equation.
Why can a marginal cost curve BE “U” shaped?
As production levels increase, the marginal cost declines and then eventually rises again. The curve has a “u” shape because when marginal cost drops at the beginning of production, marginal returns increase . However, as more of an item is produced, eventually the law of diminishing returns sets in, leading to an increase of marginal cost.
