Flashcards in Short-Run Costs 7.3-4- MarieSmith Deck (14):
Marginal cost curve is a mirror image of what?
The marginal product curve.
When graphing the marginal cost curve on which axis do you label marginal cost?
Marginal cost is on the vertical axis.
What goes on the horizontal axis of a graph of the marginal cost curve?
Total product (output) is represented on the horizontal axis.
What is marginal cost?
It is the cost of producing an extra unit of output given the # of of units you are already producing.
How are cost and productivity related?
They are reciprocally related.
Explain the reciprocal relationship between cost and productivity.
When productivity is increasing, marginal cost is decreasing. When marginal product is falling then the marginal cost is rising.
Why does marginal product fall after a certain # of workers are hired?
The workplace becomes congested and workers are unable to produce as much
Marginal cost is the slope of what curve at any point?
MC is the slope of the variable cost curve.
What does the variable cost curve show?
The increasing variable costs associated with each output level.
What is the most important point on the variable cost curve?
The inflection point.
What is the inflection point on the V C curve?
It is where the slope of the V C curve is smallest.
What happens at the inflection point of the V C curve?
The slope changes from concave to convex.
The inflection point of the V C curve may be used to find what?
The inflection point becomes the lowest point on the marginal cost curve.