Q20 of 30 Page 49

Why is the short run marginal cost curve ‘U’-shaped?

The short run marginal cost curve is ‘U’ shaped because initially the marginal cost falls but ultimately it rises. It is based upon the law of variable proportions.

Let's understand it with help of graph –


Cost Schedule

















































Output



TC



SMC



1



10



10



2



19



9



3



27



8



4



35



8



5



44



9



6



54



10



7



65



11



8



77



12



GRAPH



More from this chapter

All 30 →
18

Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?

 19

At which point does the SMC curve cut the SAC curve? Give reason in support of your answer.

 21

What do the long run marginal cost and the average cost curves look like?

 22

The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.































L



TPL



0



0



1



15



2



35



3



50



4



40



5



48