Rates of Change

Students will be able to:

• Define and compute marginal cost.
• Describe the relationship of marginal cost to the slope of the total cost and variable cost curves when those costs are plotted relative to the quantity of output produced.
• Describe the effect of increasing variable costs as fixed cost remains constant.
• Explain the difference between and the uses of marginal cost and average cost.
• Define and compute average cost relative to the quantity of output.
• Explain that Marginal Product (MP) and Marginal Cost (MC) are inversely related.
• Explain that the ratio of the total cost and the quantity of output produced is average cost of production.