Friday, February 12, 2010

Micro economy true or false question?

Average total cost reveals how much total cost will change as the firm alters its level of production?Micro economy true or false question?
Average Total Cost = AVC + AFC





The average total cost is used by firms to decide their optimal plant size based on quanity/output they wish to produce at.





So, in essence yes, it does show how the firms average cost changes at various levels of production.
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