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Production And Costs

Question

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AC and AVC can be equal at any level of output.

Solution

False; because AC is vertical summation of AFC and AVC. And AFC is never zero as TFC is fixed at all levels of output.

Some More Questions From Production And Costs Chapter

What is meant by law of supply?

What is meant by change in quantity supplied?

What is meant by change in supply?

Due to improvement of technology, marginal costs of production of televisions have gone down. How will it affect the supply curve of television?

What effect does a cost saving technological progress have on supply curve?

What effect does an increase in input price have on supply curve?

What effect does an increase in excise tax have on supply curve of product?

If a farmer grows rice and wheat, how will an increase in price of wheat affect supply curve of rice?

What is meant by market period?

How will an increase in number of firms shifts the market supply curve?

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