Marginal cost and average total cost | Microeconomics | Khan Academy

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Looking at marginal and average total cost in the context of a juice business
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22 янв 2012

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@TreadstoneClassified 10 лет назад

Maybe talk about why it's an U shaped curve, or why the MC intersects ATC at its minimum point. You know things that are not plainly obvious...

@tylerhorton7393 4 года назад

TreadstoneClassified the ATC and MC can be explained with a little calculus. ATC = TC/Q. MC = d(TC)/dQ. The minimum occurs when the first derivative of ATC with respect to Q= 0 and the second derivative of ATC with respect to Q is positive. d(ATC)/dQ = Q^(-1)d(TC)/dQ - Q^(-2)TC = 0. Rearranging, we get d(TC)/dQ = TC/Q. Subbing in out definitions of ATC and MC from before, we get ATC = MC

@markosshelby3889 3 года назад

because of law of deminishing if u talking sersly.

@anthonygordon9543 2 месяца назад

Also it’s not just about allocation firms are hands on key word ‘technically’ with employee labor

@kadiwright8436 2 года назад

I would like more analysis of how the charts influence each other. How would a business owner/manager use this information to drive decision making.

@kadiwright8436 2 года назад

My assumption is we want to hit maximum efficiency of ATC. Therefore, when we hit 9000 gal of juice produced we can see the marginal cost will influence the ATC to then go back up in the opposite direction. This indicate "law of diminishing returns." That being the marginal costs supercede the benefit to produce anymore juice for the company. Unless the company can find a new producer/manufacturer that will drive the variable costs down.