Sum+of+Ch+8+Cost+Production

Sum+of+Ch+8+Cost+Production - : When marginal product is...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Summary of Chapter 8 Cost of Production concepts 1. Total-Marginal relationship : Marginal product is the rate of change of total product. If you add the marginal products you will get the total product. When the marginal product is positive, total product is rising. When the marginal product is negative, total product is falling. Marginal cost is the rate of change of total cost. If you add the marginal cost of each unit of output you will get the total cost. When the marginal cost is falling, total cost is increasing at a decreasing rate. When the marginal cost is rising, total cost is increasing at an increasing rate. 2. Marginal-Average Product Relationship
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: : When marginal product is greater than average product, marginal product causes average product to rise. When marginal product is equal to average product, average product is at its maximum. When marginal product is less than average product, marginal product causes average product to fall. 3. Marginal-Average Cost Relationship: When marginal cost is less than average cost, marginal cost causes average cost to fall. When marginal cost is equal to average cost, average cost is at its minimum. When marginal cost is greater than average cost, marginal cost causes average cost to rise....
View Full Document

This note was uploaded on 01/09/2011 for the course ECON 130 taught by Professor Kikuchi,g during the Fall '08 term at University of Hawaii, Manoa.

Page1 / 2

Sum+of+Ch+8+Cost+Production - : When marginal product is...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online