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Definecost. State the relation betweenmarginal cost and average variable cost. |
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Answer» Solution :(i) Both AVC and MC curves are of U-shape. It shows LAW of variable portion. (II) Minimum point of AVC curve will ALWAYS right to minimum point of MC. (iii) When AVC declines, then MC curve is below to AVC. (iv) When AVC increases, then MC curve will be above to AVC. (v) When AVC is CONSTANT, then MC = AVC |
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