Which of the following equations is correct?
A)AVC - ATC = AFC
B)AVC + ATC = AFC
C)AFC + AVC = ATC
D)ATC + AVC = AFC

Question

Quizplus · Accepted Answer

AFC (Average Fixed Cost) is the sum of all fixed costs divided by the total output level. 
AVC (Average Variable Cost) is the sum of all variable costs divided by the total output level. 
ATC (Average Total Cost) is the sum of all costs (fixed and variable) divided by the total output level. 
Therefore, AFC + AVC = ATC is the correct equation.

Which of the Following Equations Is Correct