# Explain the relationship between the average

## Relationship between total cost average cost and marginal cost

Relationship The firm's marginal and average productivity use the same figures but the outcome is expressed differently. When average cost decreases as output increases, it is known as economies of scale. A Treasury bond or T-bond has a maturity length of over 10 years, with 15 and 30 years common maturities. If the marginal sixth person is, however, a mere 5' tall, the marginal is less than the average, then the average declines to 5' 5". Put another way, your average score would increase. In a large firm there is an increased gap between top and bottom. T-bonds, together with other long-term bonds issued by state and local governments and businesses, are traded in capital markets. For instance, creating a spreadsheet macro may save each worker an hour's worth of time in data input, thereby boosting overall productivity. Average and Marginal Product This average-marginal relation can be graphically illustrated, using the average product and marginal product curves displayed to the right. Shape of Average Cost Curves Jodi Beggs Because average cost includes fixed cost but marginal cost does not, it is generally the case that average cost is greater than marginal cost at small quantities of production. This reduces the unit cost of raw materials and a firm gets an advantage over other smaller firms. Some are taller than 5' 6" and some are shorter, but the average is 5' 6".

Treasury to obtain the funds used to finance the federal budget deficit. When average cost decreases as output increases, it is known as economies of scale.

Types of economies of scale Purchasing economies: When business buys in large quantities, they are able to get discounts and special prices because of buying in bulk.

On the other hand, when a company is expanding and trying to assess its labor needs, average productivity is the better measurement.

Continue Reading. There is also a risk that very expensive capital projects involving new technology may prove ineffective and leave the business with too much under-utilized capital.

Marginal productivity is different: It is the total output from the two workers minus the first, or, which is Returning to the context of production costs, think of average cost for a particular production quantity as the current average grade and marginal cost at that quantity as the grade on the next exam. Rated 6/10 based on 115 review