What is the relation between average variable cost and average cost of total fixed cost is zero?

What is the relation between average variable cost and average cost of total fixed cost is zero?

What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero? Hence, ATC = AVC, if TFC is zero.

What is the relationship between average total cost average fixed cost and average variable cost?

The average variable cost is the total variable cost divided by the quantity, average fixed cost is the fixed cost divided by the quantity, and the average total cost is the total cost divided by the quantity. Most of the time when you see these, you’re going to see them by the acronym, so AVC, AFC, and ATC.

What is the relationship between marginal cost and average variable cost when average variable cost is at its minimum?

When marginal cost is less than average variable cost, average variable cost is decreasing. When marginal cost is greater than average variable cost, average variable cost is increasing.

What is the relationship between total variable cost and average variable cost?

Average Variable Cost Definition The average variable cost (AVC) is the total variable cost per unit of output. This is found by dividing total variable cost (TVC) by total output (Q).

What is the relationship between TVC and MC?

We know, MC is addition to TVC when one more unit of output is produced. So, TVC can be obtained as summation of MC’s of all the units produced. If output is assumed to be perfectly divisible, then total area under the MC curve will be equal to TVC.

What is the relation between AVC & ATC if TFC is zero?

If TFC is zero, AFC also becomes zero. As a result, TVC = TC since the difference between total cost and total variable cost is represented by TFC.

What is the relationship between average cost marginal cost and total cost?

Average cost is obtained by dividing total cost by the number of units produced. Marginal cost is the cost of producing one additional unit of output. The total cost, in this reference, is the sum total of the total fixed cost plus total variable cost at a given level of output.

What is the relation among average cost marginal cost and total cost?

Average and Marginal Cost. Marginal cost is the change in total cost when another unit is produced; average cost is the total cost divided by the number of goods produced.

What is the relationship between average total cost and marginal cost?

The relationship between the marginal cost and average cost is the same as that between any other marginal-average quantities. When marginal cost is less than average cost, average cost falls and when marginal cost is greater than average cost, average cost rises.

When quantity is zero how are total fixed and total cost related?

The change in the total cost is always equal to zero when there are no variable costs. The marginal cost of production measures the change in total cost with respect to a change in production levels, and fixed costs do not change with production levels.

What is total cost average cost and marginal cost explain the relationship between average cost and marginal cost with the help of table and diagram?

(i) Both AC and MC are calculated from TC : Average cost can be worked out by dividing the total cost by total output. Likewise, marginal cost can also be calculated from total cost. The addition made to the total cost by producing one more unit of the commodity is called marginal cost.

What is relation between TC AC and MC?

There exists a close relationship between AC and MC. Both AC and MC are derived from total cost (TC). AC refers to TC per unit of output and MC refers to addition to TC when one more unit of output is produced.