What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?
What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?
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AVC = ATC
We know that,
TC=TFC+TVC
Dividing both the sides by 'Q', we get
Hence, TC/Q = TFC/Q + TVC/Q [.'.TFC = 0]
ATC = AVC
Graphically, both the cost curves will intersect each other. Both will be equal.
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