What is the relation between Average Variable Cost and Average Total C – InterviewSolution

1.

What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?

Answer»

AVC = ATC

We know that,

TC=TFC+TVC

Dividing both the sides by 'Q', we get

Hence, TC/Q = TFC/Q + TVC/Q [.'.TFC = 0]

ATC = AVC

Graphically, both the cost curves will intersect each other. Both will be equal.

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