Economics Cost Of Production Questions
The relationship between average cost and marginal cost is that marginal cost is the additional cost incurred by producing one more unit of output, while average cost is the total cost divided by the quantity of output produced. In general, when marginal cost is below average cost, average cost decreases. When marginal cost is above average cost, average cost increases. Therefore, the relationship between average cost and marginal cost is that average cost is influenced by the changes in marginal cost.