Use a Diagram to Show the Relationship Between Marginal Cost

question 134

Essay

Use a diagram to show the relationship between marginal cost and average variable cost, and between average variable cost, average fixed cost and average total cost.

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Definitions:

Indifference Curves

Graphs showing different bundles of goods between which a consumer is indifferent, displaying preferences for certain combinations of two commodities.

Intersect

The point at which two or more lines or paths cross or meet.

Indifference Curve

A graphical representation in economics indicating different combinations of two goods that provide the consumer with equal levels of satisfaction.

Rational Consumer

An individual who makes choices that result in the highest level of personal utility or satisfaction.