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Categories Cost Function * Average Cost * Average Fixed Cost Variable Costo Fixed Cost - - - - - - - measures the cost per un

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Answer #1

You need to put the second statement in average cost box in the cost function

For cost function we will now have two statements

  • Show the minimum cost of production, to produce a given quantity of output with all the available resources.
  • It is different from 0 primarily because of fixed cost of production including in this. It continue to increase as the output is increased because of increasing variable cost

Average cost will have only one statement, that it measures cost per unit of output.

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