Asked by
Ethirajan chakaravarthy
on Oct 12, 2024
Verified
Statement I: Average total cost less average fixed cost equals average variable cost.
Statement II: At an output of one,average total cost is equal to total cost.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Average Total Cost
The sum of all production costs (both fixed and variable) divided by the total amount of goods produced.
Average Variable Cost
The total variable costs (costs that change with production levels) divided by the quantity of output produced, representing the per-unit variable cost.
- Gain insight into how average total cost (ATC), marginal cost (MC), and average variable cost (AVC) are interconnected.
- Acquire knowledge about total, fixed, and variable costs, and understand their role in decision-making processes of businesses.
Verified Answer
SH
Learning Objectives
- Gain insight into how average total cost (ATC), marginal cost (MC), and average variable cost (AVC) are interconnected.
- Acquire knowledge about total, fixed, and variable costs, and understand their role in decision-making processes of businesses.