Marginal - continuously falling. However, initially it...

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Marginal, AVC, AFC, ATC, curves: Let us now turn to the slightly complex nature of the marginal and average cost curves. a) Marginal and Average Cost Curves: In Figure 29 we have once again shown varying output units on the horizontal axis and different cost amounts on the vertical axis. All the four cost curves have been drawn on the basis of respective values in the tables above. Marginal Cost varies as 2.5, 1.42, 1.42, 2.0, 5.0 and 10.0. Accordingly the Marginal Cost Curve has been drawn. It shows an initial downward trend but a subsequent sharp rise. AFC is based on the values 10, 3.63, 2.22, 1.73, 1.60, 1.54 therefore it is seen to be
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Unformatted text preview: continuously falling. However, initially it falls sharply and then with a slower tempo. AFC first falls sharply and then its curve becomes flatter. AVC is based on the cost values 2.5, 1.82, 1.67, 1.73, 2.0 and 2.33. Therefore AVC initially falls moderately and then it rises continuously but moderately. Since ATC is combination of both AFC and AVC, it has a mixed behavior. It is based on the values 12.5, 5.45, 3.89, 3.46, 3.60 and 3.80. The behavior of ATC is to be explained in terms of the joint behavior of AFC and ATC. It is necessary to analyze ATC more carefully....
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Marginal - continuously falling. However, initially it...

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