Statement I: Average variable cost can be found by dividing output by variable cost.
Statement II: At an output of zero,total cost is always equal to fixed cost.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question

Quizplus · Accepted Answer

Statement I is false because average variable cost is found by dividing variable cost by output, not the other way around. 
Statement II is true because when output is zero, there are no variable costs and total cost equals fixed cost.

Statement I: Average Variable Cost Can Be Found by Dividing