Asked by
Jacob punte
on Oct 12, 2024
Verified
Statement I: Average variable cost can be found by dividing output by variable cost.
Statement II: At an output of zero,total cost is always equal to fixed 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 Variable Cost
The total variable cost divided by the quantity of output produced.
Output
The amount of goods or services produced by a company, sector, or economy.
Fixed Cost
Costs that do not vary with the level of output or production, such as rent, salaries, and insurance premiums.
- Gain insight into the relationship that exists between marginal cost, average variable cost, and average total cost.
- Describe the effect of output changes on fixed, variable, and total costs.
Verified Answer
KE
Learning Objectives
- Gain insight into the relationship that exists between marginal cost, average variable cost, and average total cost.
- Describe the effect of output changes on fixed, variable, and total costs.