Chapter 55, Problem 3MCQ

To determine

Costs

Explanation of Solution

The correct statement is AVC = ATC-AFC because Average variable cost is calculated by subtracting the average fixed cost from average total cost.

Therefore, the correct option is e.

Economics Concept Introduction

Introduction:

Total cost is the sum of all costs or expenses that are incurred by a business firm while doing business activities.

Average total cost is determined by summing up the average variable cost and average fixed cost.