Question
Draw Average Variable Cost (AVC), Average Total Cost (ATC) and Marginal Cost (MC) curves in a single diagram. State the relation between MC curve and AVC & ATC curves.
✓
Answer
Relationship among MC, AVC & AC:When,
MC < ATC or AVC, ATC or AVC falls
MC = ATC or AVC, ATC or AVC constant
MC > ATC or AVC, ATC or AVC rises.
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