Refer to Figure 9.5.The firm is producing Q units.Which area represents avoidable cost?
A) ABCDE
B) EDGF
C) EDCHF
D) CHGD

Name: Refer to Figure 9.5.The firm is producing Q units.Which area represents avoidable cost? A) ABCDE B) EDGF C) EDCHF D) CHGD
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Question

Refer to Figure 9.5.The firm is producing Q units.Which area represents avoidable cost? 
A) ABCDE 
B) EDGF 
C) EDCHF 
D) CHGD

Quizplus · Accepted Answer

The avoidable cost is represented by the shaded area that is outside the relevant range or the area EDCHF in the graph. This cost can be avoided or eliminated if the company chooses not to produce at this level.