Principles of Microeconomics / Unit 17 MIC 1619 short lesson, about 20 seconds
The Cost Family
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The idea
Total cost is fixed plus variable. Average total cost is the U; average variable cost sits below it by average fixed cost, which falls forever. Marginal cost cuts both averages at their minimums.
In practice
Where marginal is below average, average falls; above, it rises.
Where people slip
Read marginal cost from the change in total cost between rows, never from a row's total.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
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