Average variable cost:
A)may be found for any output level by adding average cost and average fixed cost
B)decreases as output rises
C)increases as output rises
D)equals fixed costs divided by total product
E)graphs as a saucer-shaped curve

Question

Quizplus · Accepted Answer

The average variable cost (AVC) typically graphs as a U-shaped or saucer-shaped curve due to economies and diseconomies of scale. Initially, AVC decreases with increased output due to spreading fixed costs, but eventually rises due to diminishing returns.

Average Variable Cost