Average cost and marginal cost are interrelated and fluctuate based on supply and demand. Marginal cost is the cost of producing one additional unit, while average cost is the ratio of total cost to the total number of goods sold. When marginal cost is greater than average cost, it pulls the average up, and when […]
The law of diminishing marginal returns states that output per unit of production will decrease after a certain point, making it important for managers to consider other production inputs to avoid inefficiencies. Hiring more workers may not always lead to efficiency gains without other investments, and significant investments may be required to subvert the law […]
