Which of the Following Is Correct

question 68

Multiple Choice

Which of the following is correct?

• A)Total Fixed Cost = Total Cost + Total Variable Cost
• B)Total Cost = Total Variable Cost + Marginal Cost
• C)Average Fixed Cost = Average Total Cost - Average Variable Cost
• D)Average Total Cost = Marginal Cost + Average Fixed Cost

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Definitions:

Allocative Efficiency

A condition in which resources are distributed in such a way that no single person can be improved in their situation without negatively affecting another, thereby ensuring the optimum benefit for society.

Minimum ATC

Refers to the lowest point on the Average Total Cost curve, indicating the most efficient scale of production where the average cost per unit is minimized.

Minimum AVC

The lowest point on the average variable cost curve, indicating the most cost-efficient level of production output.

Long-Run Supply Curve

A representation in economic theory of the relationship between product supply and prices that considers all possible adjustments in the market over time.