## What is the relationship between marginal product and marginal cost curve?

Marginal cost and marginal product are inversely related to one another: as one increases, the other will automatically decrease proportionally and vice versa. Marginal product may include the additional units made by adding a single employee.

**When marginal product is equal to marginal cost?**

2 If the optimal output is where the marginal benefit is equal to marginal cost, any other cost is irrelevant. So marginal analysis also tells managers what not to consider when making decisions about future resource allocation: They should ignore average costs, fixed costs, and sunk costs.

**What is the relationship between MPl and MC?**

MC = w / MPl. The higher the marginal product of labor, i.e., the more productive labor is, the lower the marginal costs of producing output.

### What is the marginal cost curve equal to?

And, for the same reason, marginal cost is equal to average total cost when average total cost is at its minimum. Thus, the marginal cost curve rises continuously as output increases beyond some level below that where average variable cost is minimum.

**Which of the following is true of the relationship between marginal cost and marginal product?**

Which of the following is true of the relationship between marginal cost and marginal product? When marginal product increases, marginal cost falls.

**How a firm’s marginal product of Labour is related to the value of its marginal product?**

The marginal profit per unit of labor equals the marginal revenue product of labor minus the marginal cost of labor or MπL = MRPL − MCLA firm maximizes profits where MπL = 0. The marginal revenue product is the change in total revenue per unit change in the variable input assume labor. That is, MRPL = ∆TR/∆L.

## Why is MC the reciprocal of MP?

After this, if we increase the amount of variable factors knowing that fixed factors have already been used upto their maximum limit, then stage of diminishing returns or increasing cost arises (MP falls and MC starts rising). This is the reason, that MC is reciprocal of MP.

**Why MC curve is equal to MR curve at equilibrium level?**

Ans: The two necessary conditions that ensure equilibrium are: MR=MC: This ensures that neither the producer has the incentive to produce more nor the benefit is less than cost. MC becomes greater than MR after the MR=MC level of output: MR=MC can occur at more than one output level.

**What is the relationship between the marginal cost MC curve the average total cost ATC curve and the average variable cost AVC curve?**

ATC = (VC + FC)/TP. The marginal cost (MC) curve is below the average cost curves when the average cost curves are falling and above the average cost curves when they are rising.

### What is the relationship between the value of marginal product of labor and the marginal product of labor the value of marginal product of labor equals?

Answer: The value of marginal product of labor tells the additional amount of revenue the firm earns by hiring an extra unit of labor, so it is the value to a firm of hiring one more unit of labor. The value of marginal product equals the price of a unit of output multiplied by the marginal product of labor.

**How do you graph the marginal product curve?**

The marginal product (MP) curve reflects changes in total product (TP) and is drawn using the same horizontal axis. You can draw the marginal product curve below the total product curve using the same horizontal axis. On the left, labor is the horizontal axis for both curves.

**How do you find the marginal product curve?**

- Review the marginal product formula. The formula for calculating marginal product is (Q^n – Q^n-1) / (L^n – L^n-1).
- Identify Q^n. Q^n is the total production time at n, and n is the current total production time.
- Identify Q^n-1.
- Identify L^n.
- Identify L^n-1.
- Calculate marginal product.
- Calculate marginal product (simplified)

## What happens if marginal cost is equal to marginal revenue?

If marginal cost and marginal revenue are equal, your business has reached its optimal production level. At this level, efficiency has reached its peak, and you’ve maximized profits.

**Why should marginal cost equal marginal revenue?**

When marginal revenue is less than marginal cost, the company is actually losing money on units, and should cut back production. A company’s maximum profitability, then, can be reached when marginal costs equal marginal revenues. This concept stands even when a business’ output is intangible.

**What is the formula for calculating marginal cost?**

MC – marginal cost;

### What does the marginal cost curve look like?

algabby01 2 years ago Posted 2 years ago. Direct link to algabby01’s post “Can you explain more why …” more Can you explain more why AFC curve trends downward and

**How does a firm calculate marginal cost?**

It ignores the long term implications of raising a new fund.

**How do you find the marginal cost?**

– Calculate the change in cost The first step in calculating the marginal cost is calculating the change in cost. … – Calculate the change in quantity The next step in calculating the marginal cost is determining the change in quantity. … – Divide change in cost by change in quantity