Show me how to arrive at Average Variable Cost?

Q: How does a cost behave in response to a change in activity? Give an example?

A: Cost also changes with the change in the activity. There are two types of costs- fixed costs and…

Q: How can we predict cost behavior?

A: Cost behaviour shows the relation between the total cost and activities level. We can predict the…

Q: Why is the Average Total Cost curve U-shaped?

A: The average cost (AC) or average total cost (ATC) is the cost per unit of production. The average…

Q: How is the difference between average total cost and average variable cost impacted by an increase…

A: Average total cost is the total cost per unit whereas average variable cost is the total variable…

Q: Explain the difference between total cost, average cost, and marginal cost.

A: Economic cost: The economic cost is different from the accounting cost. Economics cost involves…

Q: how is the slope of the total cost and marginal cost related?

A:

Q: If the marginal cost of production is greater than the average variable cost, what does this tell…

A: Variable costs are the ones which change with the change in the level of output, i.e., it is output…

Q: Describe marginal cost in your own words.

A: Cost accounting is a method of financial management that examines a business's variable and fixed…

Q: If the marginal cost is increasing does this tell you whether the average variable cost is…

A: Economic costs involve not just the accounting costs but also the opportunity cost of making one…

Q: What does average fixed cost fall with increase in output?

A: Fixed cost per unit of output is known as average fixed cost. Because the same amount of fixed costs…

Q: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: f marginal cost is decreasing, what is happening to an average variable cost (decreasing,…

A: the marginal cost refers to the change in the total cost that arises when the quantity produced is…

Q: Average cost decrease indefinitely as output expands.   Is that true?

A: Economies of scale signifies a scenario where a firm reaps the cost benefits while carrying out…

Q: What happens to fixed cost as the quantity produced increases?

A: In the market, when a firm makes production activities, there are various costs incurred during this…

Q: What will happen to the average total cost if the average variable cost is falling? a. Rises B.…

A: The average Total cost if the the average variable cost is falling is also falling.

Q: Ifmarginal cost is below average total cost, average total cost will

A: During the production of the communities the overall cost incurred is referred to be as a total cost…

Q: Government imposes higher tax on tobacco production. Which cost curves will be affected and why of…

A: When the government imposes a higher tax on tobacco production or the output. With this tax…

Q: The government imposes a $1000 per year license fee on all pizza restaurants. As a result, which…

A: The graph showing the function of the total quantity produced is production cost said to be the cost…