What Are the Formulas for the Following Cost Concepts: Average

question 16

Essay

What are the formulas for the following cost concepts: average total cost, average fixed cost, average variable cost and marginal cost? Explain why the ATC and AVC curves get closer together as output increases.

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Definitions:

Creditor Beneficiary

A third party who benefits from a contract made between two other parties because one of the primary parties owes a debt to the beneficiary.

Contract

A legally enforceable agreement between two or more parties that creates mutual obligations.

Promisor

The person or party who makes a promise or agrees to perform an action or fulfill an obligation under a contract.

Promisee

The individual or entity to whom a promise or commitment is made, typically in a contractual agreement.