Marginal Cost
It is the change in total cost from producing an additional unit of output. It is calculated as : MCn = TCn-TCn-1 Output Total fixed cost Total variable cost Total…
It is the change in total cost from producing an additional unit of output. It is calculated as : MCn = TCn-TCn-1 Output Total fixed cost Total variable cost Total…
Average variable cost is the variable cost per unit of output. Production Variable cost Average variable cost 1 12 12 2 20 10 3 26 8.67 4 32 8 5…
It is the cost per unit of production, it is calculated with the help of the following formula: AC = Total cost/Output unit Average cost has further two components: Average…
The expenditure on the inputs of production, both factor and non-factor, for the production of a commodity is called cost of production. Examples of factor inputs are land, labour, capital,…
It states that when more and more units of the variable factors are combined with the fixed factor, the total product will initially increase at an increasing rate, followed by…
Total product: It is total output produced by all the units of a variable factor used in the production process along with some portion of the fixed factors. For example,…
Production function is a concept in economics that describes the relationship between inputs (factors of production) and the output of goods and services. In order to produce any commodity, we…
Assumptions of IC Analysis of Consumer’s Equilibrium Two Conditions of Consumer Equilibrium: This condition states that at only the point where IC and budget line are tangent to each other…
Understanding the law of diminishing marginal utility is crucial for economists and businesses when analyzing consumer behavior, setting prices, and predicting how changes in factors like income or prices might…
The law of diminishing marginal utility states that as more and more units of a commodity are consumed, the marginal utility derived from every additional unit must decline. This means…