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?

Solutions

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

Next > < Previous

Related Solutions

Explain the relationship between the marginal cost curve of an individual firm and the short run...

Explain the relationship between the marginal cost curve of an individual firm and the short run market supply curve in a perfect competition industry.

What is the relationship between marginal product of labour and marginal cost?

7 what is the relationship between marginal cost and short-run supply curve explain using graphs. 8...

7 what is the relationship between marginal cost and short-run supply curve explain using graphs. 8 using the concepts of producer and consumer surplus explain the welfare implications of major brought on producers and consumer 9 using the concepts of producer and consumer surplus explain the welfare implication of major drought on producers and consumers

Explain marginal cost. Elaborate on the relationship between the two. Elaborate the relationship between marginal cost...

Explain marginal cost. Elaborate on the relationship between the two. Elaborate the relationship between marginal cost and average cost.

Explain the relationship between a firm’s short-run production function and its short-run cost function. Focus on...

Explain the relationship between a firm’s short-run production function and its short-run cost function. Focus on the marginal product of an input and the marginal cost of production. (p. 283 #3

arranged q1 to q2 to q3 a is between q1 and q2 b is between q2...

arranged q1 to q2 to q3 a is between q1 and q2 b is between q2 and q3 Let a=3 m, b=7 m, q1=2 C, q3=-3 C. What must q2 be for q1 to feel no net force. b) Let a=3 m, b=8 m, q1=4 C, q2=5 C, q3=-5 C. What is the magnitude of the electric field a distance c=4 m vertically above q2 i.e. located at (x,y)=(a,c)?

6. The relationship between marginal physical product and marginal cost Susan's Big Burger is a small...

6. The relationship between marginal physical product and marginal cost Susan's Big Burger is a small restaurant that sells hamburgers. For Susan, grills are a fixed input and workers are variable inputs. Assume that labor is Susan's only variable cost. Susan has a fixed cost of $100 per day and pays each of her workers $80 per day. Susan's total product schedule and total cost at each level of labor are presented in the following table. Fill in the blanks...

What must be true about the relationship between marginal abatement cost and marginal damage cost to...

What must be true about the relationship between marginal abatement cost and marginal damage cost to achieve the efficient level of pollution? While the efficient level can be defined in principle, why might policy instruments to obtain the efficient level be difficult to implement in practice?

Assume diminishing marginal product, constant returns to scale and perfect competition. Draw short-run marginal cost, average...

Assume diminishing marginal product, constant returns to scale and perfect competition. Draw short-run marginal cost, average total cost and average variable cost curves for the firm. Identify market prices that induce entry, exit and shutdown on this graph. Draw the short-run supply curve for the market. Describe the relationship between the short-run supply curve for the market and the firm’s cost curves. Draw the long-run supply curve.

1. explain the relationship between total product, marginal product, and average product. 2. what is the...

1. explain the relationship between total product, marginal product, and average product. 2. what is the law of diminishing returns and does it explain the shape of the short run average cost curve.

Subjects