KTU B.TECH SECOND YEAR BUSINESS ECONOMICS [HS200] NOTE - MODULE 3 | IMPORTANT QUESTIONS


BUSINESS ECONOMICS [HS200] NOTE - MODULE 3

KTU B.TECH SECOND YEAR BUSINESS ECONOMICS [HS200] NOTE - MODULE 3  | IMPORTANT QUESTIONS,Business Economics Notes,Business Economics Questions,Business Economics important questions,Business Economics model questions,Business Economics second year notes,Business Economics second year questions,HS200 questions,HS200 notes


1. Define Marginal Cost .

Ans. In economics, marginal cost is the change in the total cost that arises when the quantity produced is incremented by one unit, that is, it is the cost of producing one more unit of a good. In general terms, marginal cost at each level of production includes any additional costs required to produce the next unit

MR-Marginal Revenue, MC-Marginal Cost

2.Define Average Cost

Ans. In economics, average cost and/or unit cost is equal to total cost divided by the number of goods produced (the output quantity, Q). 

It is also equal to the sum of average variable costs (total variable costs divided by Q) plus average fixed costs (total fixed costs divided by Q).

Average costs may be dependent on the time period considered (increasing production may be expensive or impossible in the short term, for example). 

Average costs affect the supply curve and are a fundamental component of supply and demand

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