What is relationship between total revenue (TR) and total variable cost (VC) if the price is less than AVC (is TR greater, less, or equal to VC)?

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Business

Economics

total revenue (TR) and total variable cost

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 13SQ

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Question

What is relationship between total revenue (TR) and total variable cost (VC) if the price is less than AVC (is TR greater, less, or equal to VC)?

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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