The average variable cost is equal to the average cost _____

Accounting Dec 08, 2020

The average variable cost is equal to the average cost _____.

Expert Solution

The answer is the average variable cost is equal to the average cost minus the average fixed cost.}]

The average cost has two components in the short run. They are the average fixed cost and the average variable cost. The included in the variable cost are items like wages and materials that are only incurred when product is made. Fixed costs are things like rent of the building and insurance costs that must be paid whether or not any product is made.

If we know the average cost and the average variable cost, we subtract the average variable cost from the average cost to get the average fixed cost.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote