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  • Firm's Cost Function

Convex Cost Functions and Increasing Marginal Cost

A firm's cost function, C(Q), is described as convex when its second derivative concerning quantity is positive, expressed as C′′(Q)>0C''(Q) > 0. This mathematical condition implies that the marginal cost (MC), which corresponds to the first derivative of the cost function, rises as output quantity increases. Consequently, the marginal cost curve for a firm with a convex cost function will be upward-sloping.

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Economics

Introduction to Microeconomics Course

The Economy 2.0 Microeconomics @ CORE Econ

Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ

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