Explain the relationship TC, TFC & TVC.a)TVC+TFC= TCb)TVC X TFC= TCc)TVC-TFC= TCd)TVC/TFC=TCCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Relationship between TFC, TVC, and TC. Total fixed cost (TFC) is represented by a straight line parallel to X-axis and it remains unchanged for all output levels in a time period. ... TC is the sum of TFC and TVC. When no variable output is added, TC is equal to TFC.

Answer

TC (Total Cost) represents the total cost of producing a certain level of output, including both fixed and variable costs. TFC (Total Fixed Cost) represents the total cost of the fixed inputs used in production, such as rent, salaries, and insurance. TFC remains constant regardless of the level of output because these costs do not vary with production levels. The relationship between TC and TFC is that TFC is a component of TC, and the difference between TC and TFC is the variable cost (TVC) of producing the output. Therefore, TC = TFC + TVC. As the level of output increases, TVC increases, and the TC curve becomes steeper, while the TFC curve remains the same.

Answer

TC include both the cost ..the one spend on fixed asset s and the other spend on variable assets ..so tc is the sum of tvc and tfc

Answer

In any business the total cost incurred is categorised as variable cost and fixed cost.The total fixed cost i.e.TFC and the total variable cost i.e. TVC incurred in producing goods and services in that business constitutes the Total Cost i.e.TC.

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