## CZ 23 12G2

To the left of q = 6, AC is declining, and thus MC lies below it; to the right, the opposite is true. At q = 6, AC has a slope of zero, and MC and AC have the same value.*

The qualitative conclusion in (7.10) is stated explicitly in terms of cost functions^ However, its validity remains unaffected if we interpret C{Q) as any other differentiate total function, with C(Q)/{J and C'(Q) as its corresponding^ average and marginal functions. Thus this result gives us a general marginal-average relationship. In particular, we may point out, the fact that. MR lies below AR .when AR is downward-sloping, as discussed in connection with Fig. 7.2, is nothing but a special case of the general result in (7.10).

* Note that (7.10) does not state that, when AC is negatively sloped, MC must also be negatively sloped; it merely says that AC must exceed MC in that circumstance. At Q = 5 in Fig. 7.3, for instance, AC is declining but MC is rising, so that their slopes will have opposite signs.

## Post a comment