Question

Why is MC curve U shape? Explain with the support of relevant diagrams.

Why is MC curve U shape? Explain with the support of relevant diagrams.

Homework Answers

Answer #1

It can actually be mentioned that marginal cost curve is u shaped because initially at lower amount of production, what happens is that there would be more amused capacity of the existing inputs as a result of which you can produce more with same input as a result of which the marginal cost keeps on decreasing in the whole but at a point what happens is that the total capacity of the input the saturated and you have to go for new inputs as a result of which in the the cost seems to increase with which the marginal cost increases and because it is decreasing in the beginning and increasing later on it is considered as u shaped curve

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why does the IS curve have the shape that it does? Explain using words and diagrams.
Why does the IS curve have the shape that it does? Explain using words and diagrams.
1. In general, the marginal cost (MC) curve is U-shaped as you learned in the lectures...
1. In general, the marginal cost (MC) curve is U-shaped as you learned in the lectures and the textbook. However, exception exists. Please provide at least two industries as example to illustrate that MC is not U-shaped. Explain briefly the shape of MC in the two industries. 2.  Assume that engineers at a national research laboratory built a prototype automobile that could be driven 50 miles on a single gallon of water as fuel. They estimate that in mass production the...
True or False? The U shape of the long-run ATC curve is the result of diminishing...
True or False? The U shape of the long-run ATC curve is the result of diminishing returns. Explain why.
Describe the shape of the typical production possibitties curve and explain why it has this shape.
Describe the shape of the typical production possibitties curve and explain why it has this shape.
Draw the marginal cost (MC) curve for a typical firm. Why does MC eventually increase? Explain...
Draw the marginal cost (MC) curve for a typical firm. Why does MC eventually increase? Explain fully. Where is MPL maximized along the MC curve? Why? Marginal cost is the slope of which function?
What contributes to the typical U shape of the average total cost curve
What contributes to the typical U shape of the average total cost curve
Why does the J-curve have that shape? Explain carefully using your understanding of the relation between...
Why does the J-curve have that shape? Explain carefully using your understanding of the relation between Marshall-Lerner condition and the J-Curve.
Explain and describe the shape of the yield curve if investors think that short-term interest rates...
Explain and describe the shape of the yield curve if investors think that short-term interest rates are likely to decrease in the future. Why does the yield curve have this shape?
Explain and describe the shape of the yield curve if investors think that short-term interest rates...
Explain and describe the shape of the yield curve if investors think that short-term interest rates are likely to decrease in the future. Why does the yield curve have this shape?
Explain the shape of the Long run average cost curve and comment on the shape of...
Explain the shape of the Long run average cost curve and comment on the shape of the modern day LAC.