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Marginal Beneńt and Marginal Cost

Q Kevin Smith

Role of Marginal Cost

Marginal Cost has the same kind of relationship - as you increase your production, your marginal cost will go up (how much it costs to bring one morę carrot to market). In fact, the marginal cost actually starts going up before the average cost. and they share an interesting relationship.

Ouantity

The Marginal Cost curve will always intersect the absolute minimum point of the average cost curve. This relationship is useful - when an economist wants to calculate the minimum average cost. all they need is a formula for the average cost and marginal cost. and find the quantity where they are equal.

Marginal Benefits

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Contents of This Article

What Does “Marginal" Mean? Average Cost - The U Curve Role of Marginal Cost Marginal Benefits Profit Maximization - Businesses Marginal Costs and Benefits With Public Services Pop Quiz

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