7 As with the other graphs, don't worry about the meaning of marginal cost at this point. Marginal Cost curves will be covered in detail in Chapter 5.
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To the right we show a positive nonlinear relationship. It is a positive relationship because higher Quantities, Q, are associated with higher Costs, $. Since the graph of this relationship is a curve, it is termed nonlinear. This particular graph is the upward sloping portion of a Marginal Cost, MC, curve.7
In this case, the graph to the right shows a relationship that is increasing at an increasing rate. As Quantity increases, cost increases at a faster rate. When Q increases from 12 to 22, an increase of 10 units, $ only increases from 6 to 10, or 4 units. However, when Q increases from 22 to 30, an increase of only 8, $ increases from 10 to 20, or an increase of 10 units. A relationship such as this is said to be increasing at an increasing rate.
7 As with the other graphs, don't worry about the meaning of marginal cost at this point. Marginal Cost curves will be covered in detail in Chapter 5.
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