Q1:What is the relationship between marginal product and marginal cost in short run? Q2:What is the...

Q1:What is the relationship between marginal product and marginal cost in short run?

Q2:What is the effect or application of elasticity of demand in real life business?

Q3:application of economics in any other fields such as health economics, industrial economics, agricultural economics, choice of cheapest technology out of many?

Q4:why do businesses charge different prices for the same product or service... rationale?

Q5:If I have a salon, what the best way on economic to get more profit?!

Q6:What is the economies of health sector or hospitality sector and who will the demand and supply?

Expert Solution

Q.1 .Relation between marginal cost and marginal product in short run:

Answer: Short run is a time period in which one factor of production remains constant. Marginal product is the last product and marginal cost (MC)is the cost of producing last product. Formula is : MC= Change in total cost / Change in total products.

As shown in the diagram below, Average variable cost (AVC)curve Marginal cost curve are mirror images of Average product and marginal product curves. This happens due to law of diminishing returns. Till the output level when average product is above marginal product, marginal product is increasing. Because at low output marginal product of labor increases and cost decreases as increase in output is more than increase in cost. At higher output cost increase is more than product output due to space and productivity constraints. In short MC and MP are mirror images of each other.

Rahul Sunny answered 1 year ago

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