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Production And Costs
Question
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What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?

Answer

The relation is defined as below,
As we know,
ATC = (TFC+ TVC)/Q
AVC=  TVC/Q
If TFC = 0
Then, ATC = (0+TVC)/Q = AVC
Hence, ATC = AVC, if TFC is zero.

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