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4 January, 04:57

When marginal cost is greater than average cost, an increase in output up arrow average cost. When marginal cost is less than average cost, an increase in output ▼ up arrow down arrow average cost.

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  1. 4 January, 07:07
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    MC > AC : AC rise; MC < AC : AC fall; MC = AC : AC minimum.

    Explanation:

    Marginal Cost MC is addition to total cost with an additional production.

    ∆C/∆Q

    Average Cost AC is average cost per unit of production output. C / Q

    Relationship between AC & TC : Average move in direction of Marginal.

    MC > AC : AC rises

    MC < AC : AC falls

    MC = AC : AC is minimum
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