User:AliHussein

I'm just Alii, that is it!

Calculs is often used to solve economic problems in every days life. especially economic concepts concerning costs, profits and losses. forinstance if we look at the relationship between average cost and margianl cost. Marginal cost is the cost incured in producing an additional unit of a product. it is the cost per unit of a product as a gainst a total cost.it is therefore the variable cost of producing one more product of a unit whereas average cost is the average cost is the cost of production at an activity level. it is the total cost divided by the total production. when the average cost is less than the marginal cost MC>AC marginal cost pulls the average upward. when marginal cost is less than the average cost MC<AC marginal cost pulls the average cost downward. therefore im going to design an equation involved when margianl cost has no effect on average cost that is MC=AC. this is the point at which the marginal cost cuts the average cost at it's minimum.

Let us take Average cost as C/X and Marginal cost as dc/dx where c is the cost of the item and x is the number of items

Now:

    d/dx[c(X)/x]=0

    [xdc/dx-c(x)(1)]/x^2 =0

    xdc/dx-c =0

     xdc/dx =c

Therefore dc/dx = c/x which shows the relationship that MC = AV