If p = 10 - y and TC(y)= 4y, then AC:
A)increases as output increases.
B)is independent of output.
C)falls as output increases.
D)is rising at low output and falling at high output.

Question

Quizplus · Accepted Answer

AC is independent of output because TC(y) = 4y, which means that the total cost is directly proportional to the output. Therefore, the average cost (AC) is constant and does not change as the output changes.

If P = 10 - Y and TC(y)= 4y, Then