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Here’s what to know about the Marginal Cost (MC) curve: 1) It’s downward sloping at first due to initial efficiencies in production. Early on, it actually costs us less additional $ to produce more. 2) It eventually sharply rises due to the law of diminishing returns. We pass a certain point at which we get “too many cooks in the kitchen”. Each unit becomes more and more costly. 3) The AVC and ATC curves are derived from the MC curve. That’s why when it surpasses their height, they follow and cu
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Here’s what to know about the Marginal Cost (MC) curve: 1) It’s downward sloping at first due to initial efficiencies in production. Early on, it actually costs us less additional $ to produce more. 2) It eventually sharply rises due to the law of diminishing returns. We pass a certain point at which we get “too many cooks in the kitchen”. Each unit becomes more and more costly. 3) The AVC and ATC curves are derived from the MC curve. That’s why when it surpasses their height, they follow and cu
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