Behind the Supply Curve: Input and costs - Two key concepts: Marginal Cost and Average Cost - Average Total Cost
12 important questions on Behind the Supply Curve: Input and costs - Two key concepts: Marginal Cost and Average Cost - Average Total Cost
Difference between marginal cost and Average cost?
- Marginal cost tells us how much one more unit is going to cost to produce
- average cost tells us how much the the average or typical, any piece of the product of output would cost
What is the name of curve of the average total cost that corresponds to how it first falls then rises as output increases?
why is it falling first and rising? What doe we call the point in which it changes from falling to rising?
The U shaped average total cost curve
- because with less variable input to begin with it starts falling until it increases when more variable input is employed
- Minimum average total cost
Why is the average total cost U shaped? What are the 2 components used to explain it?
- It U shaped because the variable input increases over time increasing the output
- average fixed cost and average total cost
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I immediately started to enjoy learning again, and my grades soared. All of a sudden, everything went better. I highly recommend Study Smart to all students..
Being able to create my materials online made the process of studying so much smoother and quicker. I no longer have to spend a huge amount of my time on creating my summaries.
At first, my notes were a mess. Now I use Study Smart to take my notes in a perfectly structured way. It helps me to save a lot of time and do other things I enjoy.
Students that study with Study Smart get better grades. The system applies all the learning methods in such a way that both well-performing students and students who struggle perform much better.
Hi Chris, I would like to thank you very much. Last year I scored C on a course, and this year I got an A+ thanks to your method! Thank you very much!
The largest effect is that my child is more enthusiastic about school! Every parent wants their children to be happy at school, Study Smart made it happen.
In high school, I failed several exams, and that has really changed now. I actually needed this tool very much back then. Since I started studying with StudySmart, I haven't had any D's. My average score is now an A and those are results I would have never had in the past
With my old method, I passed only 3 out of 8 courses. Since I started taking my notes digitally in Study Smart, I have passed all my courses on the first try. For me, StudySmart takes away the stress of wondering if I will pass or not.
Thanks to StudySmart, I passed all my exams, and with better grades than before! On top of that, I have mastered a very good study method now, which I am confident will help me earn my degree.
For my 1st exam I got a C. Then, I started looking for ways to learn better and I came across Study Smart. Since then I have scored a A+, A, A- and another A. I highly recommend it to everyone who wants to hear it. I am so happy with it!!
I was struggling to finish all my first-year subjects for 3 years. Then I discovered Study Smart, which helped me to finish all of them within 3 months.
Because of StudySmart, things are going well in many ways. Before, I always had study stress and no time for anything. Now I feel calm and confident (because of the program). I used to score a B, now I usually score an A or A+.
Hey Chris, I really want to thank you very much for developing the platform, I usually got around C for my exams, now I scored an A+, an A and a A- !!
Since using Study Smart, my average has increased significantly. I even completed a statistics course with a A+ while I'm bad at statistics. I took on extra courses this year, because of Study Smart. Thanks so much!
Ever since I started studying with StudySmart I passed all my exams !!! No more re-sits!! At first, I was happy with a pass and now I only get good grades. Many thanks!
I aced all the courses I studied with Study Smart. For law, I first scored a D, and now an A! I’m 100% sure that I’ll pass all the courses I study with Study Smart.
I always thought I studied well. My grades were fine. I could never have imagined that applying these study skills would have such a huge and direct impact on my grades, my speed and the pleasure I have in learning.
For the first time, I finally feel totally confident about the way I learn. I have the perfect overview and make great progress in terms of speed and the grades I get. Thanks, Chris!
In what direction does the AVC and the AFC move as output rises?
When does the average fixed cost fall? Thin about how the formula works Kittye
What happens to the average variable cost when the output increases? And why?
- the average variable cost rises as output increases., each additional output incurs more variable costs to produce than the previous unit
- Because of diminishing returns to scale
What opposing effects does increasing output have on Average total cost? What are they?
- The spreading effect (fixed cost): the larger the output the greater the quantity of output over fixed cost is spread, leading to a lower fixed cost
- the diminishing returns effect: the larger the output the greater the amount input required to produce additional unites leading to a higher average variable cost
At which level of output is the spreading effect most powerful, high or low? And why? So which effect dominates? So what happens to the graph at these points?
- At low levels of output the spreading effect is very powerful
- because even a small increase in quantity will decrease the fixed cost drastically.
- the spreading effect dominated the diminishing returns effect
- the ATC curve slopes upward
At whic level of output is the diminsishing effects most powerful, high or low? And why? So which effect dominates? So what happens to the graph at these point?
- At high levels the diminishing reterns effect is very power
- because as output is large the variable cost starts becoming more and more costly
- the diminishing returns effect dominates the spreading effect
- the ATC curve slopes downward
Why does marginal cost slope upwards?
Why does the AVC slope upward?, but what is its difference from MC? Why?
- Due to diminishing returns.
- but it is flatter than the MC curve
- because the higher cost of every input is averaged across all outputs not just one of them
Why is the AFC downward sloping?
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