A function describing the average cost of producing units of output counting only the cost of those factors of production that can vary in the short run is known as the short-run average variable cost function.

Question

Quizplus · Accepted Answer

The statement correctly describes the short-run average variable cost function. This function only includes the factors of production that can be varied in the short run, such as labor and raw materials, and does not take into account fixed costs, such as rent or mortgage payments.

A Function Describing the Average Cost of Producing Units of Output