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Average Marginal cost is...

Average Marginal cost is

A

`(d)/(dx)(AC)`

B

`(d)/(dx)(MC)`

C

`(MC)/(x)`

D

`(d)/(dx)(AC + MC)`

Text Solution

AI Generated Solution

The correct Answer is:
To solve the question "Average Marginal Cost is", we need to understand the relationship between average cost and marginal cost. ### Step-by-Step Solution: 1. **Understanding Average Cost (AC)**: - Average Cost is defined as the total cost (TC) divided by the quantity of output (Q). - Formula: \[ AC = \frac{TC}{Q} \] 2. **Understanding Marginal Cost (MC)**: - Marginal Cost is the additional cost incurred by producing one more unit of a good or service. - It can be calculated as the change in total cost when the quantity produced is increased by one unit. - Formula: \[ MC = \frac{d(TC)}{dQ} \] 3. **Finding Average Marginal Cost**: - Average Marginal Cost can be interpreted as the change in average cost with respect to the change in quantity produced. - Mathematically, this can be represented as the derivative of the average cost with respect to quantity. - Formula: \[ \text{Average Marginal Cost} = \frac{d(AC)}{dQ} \] 4. **Relating Marginal Cost to Average Cost**: - The relationship between marginal cost and average cost can be expressed as: \[ MC = AC + Q \cdot \frac{d(AC)}{dQ} \] - From this, we can derive that: \[ \frac{d(AC)}{dQ} = \frac{MC - AC}{Q} \] 5. **Conclusion**: - Thus, the average marginal cost is effectively the derivative of the average cost with respect to output quantity, which can be expressed as: \[ \text{Average Marginal Cost} = \frac{d(AC)}{dQ} \] ### Final Answer: The average marginal cost is given by the formula: \[ \text{Average Marginal Cost} = \frac{d(AC)}{dQ} \]
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