In Order to Be Drawn Correctly the Minimum of the AVC

question 146

Multiple Choice

In order to be drawn correctly the minimum of the AVC is

• A)To the left and up from the minimum of the MC.
• B)To the left and down from the minimum of the ATC.
• C)To the left and up of the minimum of the ATC.
• D)Vertically straight down from the minimum of the ATC (neither to the right nor left).

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Definitions:

Variable Cost

Costs that change in proportion to the level of output in the production process.

Marginal Product

The marginal product is the additional output produced as a result of using one more unit of a particular input, holding all other inputs constant.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the variable cost per unit of output.

Average Fixed Cost

Average fixed cost is the fixed cost per unit of output, calculated by dividing total fixed costs by the number of units produced, which decreases as production increases.