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PDFLecture 4 – Costs.pdfIMGWhiteboard, 12 OctMP3Recording – Giulia

Production and costs

Covers 100% of 3 files2 sources disagree

Marginal cost is the extra cost of producing one more unit. When it is below average cost it pulls the average down; when it is above, it pulls the average up. That is why the two curves meet exactly where average cost is lowest.

Your sources disagree

Slides: MC crosses AC at its minimum. Giulia's notes: at its maximum. The slides are right; check with the professor if unsure.

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