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Homework answers / question archive / Show mathematically that when marginal cost is increasing, average cost must be less than the marginal cost
Show mathematically that when marginal cost is increasing, average cost must be less than the marginal cost.
C= A+BQ: Cost function
AC= A/Q+B: AC = Average cost
MC= B: MC= marginal cost
When MC is rising, B>0.
So, AC=A/Q+MC.
As A/Q>0, So, AC<MC.
