Homework Answers
Ans:
| Valid | Invalid |
| Graph B | Graph A |
| Graph F | Graph C |
| Graph D | |
| Graph E |
Explanation:
ATC & AVC curve intersects MC curve at their respective minimum point. Initially ATC curve lies above the MC curve but after intersection MC curve will lie on the above of ATC curve. AVC curve always remains below the ATC curve because for the fixed cost . As we know total cost is the sum of fixed cost and variable cost.
TC = FC + VC
AVC = VC / Q
ATC = TC / Q
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graph the short-run average cost curves.
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bakers (L) cakes (0) Total Revenue Marg Rev MPL TFC TVC T C AFC AVC ATC MC P(cake) Fixed Fixed cost wage $6 each capital $200 $50 per baker 20 38 56 73 104 133 158 191 219 250 277 296
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