Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 5 Firm Behavior and the Organization of Industry
Chapter 13 of 36 The Costs of Production
Section 18 of 22
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· is less than average total cost (ATC), ATC is falling
· is greater than ATC, ATC is rising
This can be seen when comparing columns 7 and 8 in Table 2 and MC and ATC curves on Figure 4.
This relationship between MC and ATC means the MC curve crosses the ATC curve at the ATC minimum point.
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As the MC rises
· at low levels of output, MC is below ATC, so ATC is falling
· as level of output increases the two curves cross
· at high levels of output, MC is above ATC, so ATC is rising
Note on Table 2 and Figure 4, when increasing quantity from 4 to 7
· ATC moves from $1.35 down to $1.30 then up to $1.33
· MC moves from $1.10 to $1.50
· ATC and MC intersect at $1.30, between quantity 5 and 6
… …
intersection point
kōsa ten
交差点
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