0
Marginal cost curve is u-shaped curve, this is due to law of variable proportion(return to factors), firstly, there is an increasing return (i.e, decreasing cost) then there is a stage of constant returns (i.e, constant cost) then lastly comes the stage of decreasing returns (i.e increasing cost), that`s why marginal cost curve first slopes downward and then slope upward and become u-shaped.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
What are typical shapes of marginal-benefit curves?
Marginal Benefit curve is usually downward sloping, while Marginal Cost is usually upward sloping.
If marginal revenue is less than average revenue will the demand curve be downward sloping?
This question reflects a fundamental misunderstanding of supply and demand. Marginal revenue and average revenue are related to a firm's cost function, and are thus connected to SUPPLY. They have nothing to do with a demand curve in classical economics, which is the marginal benefit to the CONSUMER of being in the market.
6 If the average total cost curve is falling what is necessarily true of the marginal cost curve If the average total cost curve is rising what is necessarily true of the marginal cost curve?
When average total cost curve is falling it is necessarily above the marginal cost curve. If the average total cost curve is rising, it is necessarily below the marginal cost curve.
The supply curve of a monopoly is its marginal cost curve true or false?
Flase, The suuply curve of a "perfect competition" is its marginal cost curve
Why does the marginal cost curve correspond to the supply curve?
A perfectly competitive firm's supply curve is that portion of its' marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along it's marginal cost curve in response to alternative prices. Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, the firm's supply curve is also positively sloped.
What are typical shapes of marginal-benefit curves?
Marginal Benefit curve is usually downward sloping, while Marginal Cost is usually upward sloping.
If marginal revenue is less than average revenue will the demand curve be downward sloping?
This question reflects a fundamental misunderstanding of supply and demand. Marginal revenue and average revenue are related to a firm's cost function, and are thus connected to SUPPLY. They have nothing to do with a demand curve in classical economics, which is the marginal benefit to the CONSUMER of being in the market.
6 If the average total cost curve is falling what is necessarily true of the marginal cost curve If the average total cost curve is rising what is necessarily true of the marginal cost curve?
When average total cost curve is falling it is necessarily above the marginal cost curve. If the average total cost curve is rising, it is necessarily below the marginal cost curve.
The supply curve of a monopoly is its marginal cost curve true or false?
Flase, The suuply curve of a "perfect competition" is its marginal cost curve
Why does the marginal cost curve correspond to the supply curve?
A perfectly competitive firm's supply curve is that portion of its' marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along it's marginal cost curve in response to alternative prices. Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, the firm's supply curve is also positively sloped.
What happens when the slope of the total revenue curve is equal to the slope of the total cost curve?
a. monopoly profit is maximized. b. marginal revenue equals marginal cost. c. the marginal cost curve intersects the total average cost curve. d. the total cost curve is at its minimum. e. Both A and B
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
Discuss equilibrium of a firm under monopoly what are the conditions of equilibrium?
when marginal revenue equal to marginal cost,when marginal cost curve cut marginal revenue curve from the below and when price is greter than average total cost
Why supply curve of a monopoly equals to its marginal cost curve?
It's not
A purely competitive firm's short-run supply curve is?
Because of the price taking nature of the firm in the perfectly competitive market. The supply curve would be the portin of the (Marginal Cost Curve) that disects the (P=Ar=Mr curves). Som from that point up would be the supply curve, to produce below that point would not be beneficial to the establishment. Up sloping and equal to the portion of the marginal cost curve that lies above the average variable cost. The demand curve is also perfectly elastic, this too contributes to the fact.
The price charged by a profit-maximizing monopolist occurs at?
the point where the marginal cost curve intersects the marginal revenue curve
Does marginal cost curve always intersect the average cost curve at the average cost curve's lowest point?
When the marginal cost is below the average total costs or the average variable costs,then the AC would be declining.When marginal cost is above the average cost then the average cost would be increasing.Therefore the marginal cost should intersect with the average cost at the lowest point in order to pull the average cost upwards.
