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Which of the following statements is true of the relationship among the average cost functions?
- a)ATC = AFC – AVC.
- b)AVC = AFC + ATC.
- c)AFC = ATC + AVC.
- d)AFC = ATC – AVC.
Correct answer is option 'D'. Can you explain this answer?
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Which of the following statements is true of the relationship among th...
D is the right answer because ATC include both AFC and AVC. There is a relationship between all. ATC =AFC + AVCso, AFC= ATC -AVC
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Which of the following statements is true of the relationship among th...
Relationship among Average Cost Functions
The relationship among the average cost functions can be explained as follows:
Average Fixed Cost (AFC)
AFC is the fixed cost per unit of output. It decreases as the output increases. AFC can be calculated as follows:
AFC = Total Fixed Cost / Quantity of Output
Average Variable Cost (AVC)
AVC is the variable cost per unit of output. It varies with the level of output. AVC can be calculated as follows:
AVC = Total Variable Cost / Quantity of Output
Average Total Cost (ATC)
ATC is the total cost per unit of output. It is the sum of AFC and AVC. ATC can be calculated as follows:
ATC = Total Cost / Quantity of Output
Relationship among Average Cost Functions
The relationship among the average cost functions can be expressed as follows:
- AFC = ATC - AVC
- ATC = AFC + AVC
- AVC = ATC - AFC
Therefore, it can be concluded that:
- AFC and ATC have a positive relationship.
- AVC and ATC have a U-shaped relationship.
- AFC and AVC have a negative relationship.
Correct answer
Option D is correct because it states that AFC is equal to the difference between ATC and AVC. This is true because:
AFC = ATC - AVC
Rearranging the above equation, we get:
AFC + AVC = ATC
Therefore, the correct option is D, which states that AFC is equal to ATC minus AVC.
The relationship among the average cost functions can be explained as follows:
Average Fixed Cost (AFC)
AFC is the fixed cost per unit of output. It decreases as the output increases. AFC can be calculated as follows:
AFC = Total Fixed Cost / Quantity of Output
Average Variable Cost (AVC)
AVC is the variable cost per unit of output. It varies with the level of output. AVC can be calculated as follows:
AVC = Total Variable Cost / Quantity of Output
Average Total Cost (ATC)
ATC is the total cost per unit of output. It is the sum of AFC and AVC. ATC can be calculated as follows:
ATC = Total Cost / Quantity of Output
Relationship among Average Cost Functions
The relationship among the average cost functions can be expressed as follows:
- AFC = ATC - AVC
- ATC = AFC + AVC
- AVC = ATC - AFC
Therefore, it can be concluded that:
- AFC and ATC have a positive relationship.
- AVC and ATC have a U-shaped relationship.
- AFC and AVC have a negative relationship.
Correct answer
Option D is correct because it states that AFC is equal to the difference between ATC and AVC. This is true because:
AFC = ATC - AVC
Rearranging the above equation, we get:
AFC + AVC = ATC
Therefore, the correct option is D, which states that AFC is equal to ATC minus AVC.
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Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer?
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Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer?.
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Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following statements is true of the relationship among the average cost functions?a)ATC = AFC – AVC.b)AVC = AFC + ATC.c)AFC = ATC + AVC.d)AFC = ATC – AVC.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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