Let the TC curve be given by the equation TC(Q) = 10 + 5Q. The average variable cost can be expressed as

Question

Quizplus · Accepted Answer

The formula for average variable cost (AVC) is AVC = VC(Q)/Q, where VC(Q) is the total variable cost at quantity Q.

In this case, the total variable cost is given by VC(Q) = TC(Q) - FC, where FC is the fixed cost. Since the fixed cost is not given, we can assume it to be zero for simplicity.

Therefore, VC(Q) = TC(Q) = 10 + 5Q.

Substituting this into the formula for AVC, we get:

AVC = (10 + 5Q)/Q = (10/Q) + 5.

Therefore, the answer is (B).

Let the TC Curve Be Given by the Equation TC(Q)