Answered: 7. Which of the following are true?…

7. Which of the following are true? (check all that apply) a. AC=MC at the minimum of the AC b. the AFC is always decreasing c. AVC=MC at the minimum of the AVC d. AFC=MC at the minimum of the MC

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 2PA

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Question

7. Which of the following are true? (check all that apply)

a. AC=MC at the minimum of the AC

b. the AFC is always decreasing

c. AVC=MC at the minimum of the AVC

d. AFC=MC at the minimum of the MC

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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