Explain the relationship between marginal cost and average ...

[karlynnae]

Explain the relationship between marginal cost and average variable cost.
 
  What will be an ideal response?

Question 2

Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
 
  A) the marginal benefit of each of the 10,000 units of iced tea equals 3.
  B) marginal benefit is less than marginal cost.
  C) the deadweight loss is equal to economic surplus.
  D) producer surplus equals consumer surplus.

[Kjones0604]

Answer to Question 1

If MC is less than AVC, then AVC is decreasing. If MC is greater than AVC, then AVC is increasing. If MC = AVC, then AVC is minimized.

Answer to Question 2

A

[karlynnae]

TYSM

[cam1229]

Thanks for the timely response, appreciate it