Average variable cost does NOT equal:
A)variable cost divided by output.
B)total cost minus fixed cost divided by output.
C)average total cost minus average fixed cost.
D)variable cost times output.

Question

Quizplus · Accepted Answer

D is incorrect because variable cost times output would give you the total variable cost, not the average variable cost. Average variable cost is calculated by dividing the variable cost by the quantity of output, not by multiplying them.

Average Variable Cost Does NOT Equal