The Relationship Between Average Cost and Marginal Cost

If marginal cost is above average cost, it will drive the average cost up. If marginal cost is below average cost, it will drive the average cost down.

Concept: Average Cost and Marginal Cost

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Concept: Patterns of MC, AFC, AVC, and ATC curves

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Example: Cost Curves

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Example: Cost Curves

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Example: Cost Curves

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