Which of the following is correct?
A) AFC = TC/Q - TVC/Q
B) AVC = TVC - AFC
C) TC = AVC∗Q
D) MC = TC - TVC

Name: Which of the following is correct? A) AFC = TC/Q - TVC/Q B) AVC = TVC - AFC C) TC = AVC∗Q D) MC = TC - TVC
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A) AFC = TC/Q - TVC/Q is incorrect because AFC (Average Fixed Cost) is actually calculated as TFC (Total Fixed Cost) divided by Q (Quantity), not TC (Total Cost) minus TVC (Total Variable Cost) divided by Q. The correct formula for AFC is AFC = TFC/Q.

Which of the Following Is Correct