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Short-run average and marginal costs

Unit 6: Cost and Revenue CurvesTopic 3 of 6
Browse the Microeconomics for Business syllabus

Microeconomics for Business

8 units
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What the syllabus expects

  • Derivation and relationships
  • Why short-run average cost is U-shaped
  • Relationship between AC and MC

Short-run average and marginal costs

Bachelor of Business Studies (BBS) — First Year

Subject: Microeconomics for Business (MGT 207)

Unit 6: Cost and Revenue Curves

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of short-run average and marginal costs.
  • Explain the economic reasoning and use appropriate diagrams or relationships in business analysis.

Curriculum Scope

  • Derivation and relationships
  • Why short-run average cost is U-shaped
  • Relationship between AC and MC

Detailed Microsyllabus

  1. Average and marginal costs

    1. Derive average fixed, average variable and average total cost.
    2. Derive marginal cost from changes in total cost.
    3. Relationships among short-run cost measures.

  2. Curve relationships

    1. Explain the conventional U-shaped average-cost pattern.
    2. Marginal cost below or above an average and its effect on that average.
    3. Intersection of marginal and average cost at the average's minimum under standard conditions.

Curriculum reference: Tribhuvan University, Faculty of Management, BBS curriculum with first-year syllabus, PDF pages 17-19.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit lecture hours apply to the whole unit; no separate topic hours or marks are assigned here. The programme subject list identifies this course as MGT 207; the detailed subject heading in the source prints MGT 203.