Relationship between Marginal Cost and Average Cost

There is a unique relationship between AC and MC, that is described as below:

  1. When AC is minimum, MC is equal to AC. Thus MC intersect AC at its lowest point.
  2. When AC is falling, MC is always below AC. In fact, it is the MC that pulls down AC along with its. The point to note here is that MC may be rising, but will remain below AC.
  3. When AC is rising, MC must be above AC.

Powered By 360Presence

Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off

By Hassham

Leave a Reply

Your email address will not be published. Required fields are marked *