In the figure given below,curves F,C,and G denote the total cost,the total variable cost,and the total fixed cost of a firm.
-Refer to Figure 8-1.Which of the following is true at the output level BT?
A)The firm's fixed cost is RT.
B)The firm's average variable cost is RT/BT.
C)The firm's marginal cost is RT/RB.
D)The firm's variable cost is AB

Question

In the figure given below,curves F,C,and G denote the total cost,the total variable cost,and the total fixed cost of a firm. 
-Refer to Figure 8-1.Which of the following is true at the output level BT?
A)The firm's fixed cost is RT. 
B)The firm's average variable cost is RT/BT. 
C)The firm's marginal cost is RT/RB. 
D)The firm's variable cost is AB

Quizplus · Accepted Answer

At output level BT, the total variable cost (curve C) is CT, and the total fixed cost (curve G) is RT. Therefore, the total cost (curve F) is FT=CT+RT. To find the average variable cost at output level BT, we divide CT by BT: AVC=CT/BT. So, the correct statement is B)The firm's average variable cost is RT/BT.

In the Figure Given Below,curves F,C,and G Denote the Total