Coursework : Suppose that the total cost function TC(q) is differentiable, which is the sum of variable cost VC and fixed cost FC. Let MC and AVC be marginal cost and average variable cost, respectively. Prove: if MC>AVC, AVC increases; if MC < AVC, AVC decreases.
Coursework Suppose that the total cost function TC(q) is differentiable, which is the sum of variable cost VC and fixed cost FC. Let MC and AVC be marginal cost and average variable cost, respectively. Prove: if MC>AVC, AVC increases; if MC < AVC, AVC decreases; at the minimum of AVC, AVC=MC.