Question 8
Theory of Costs and RevenueAt any given level of output, a firm's total variable cost equals
- A.total cost less marginal cost
- B.total cost less total fixed costs
- C.total cost less average cost
- D.average variable cost and marginal variable cost
Show the answer and explanation
Answer: B (total cost less total fixed costs)
Explanation
Total cost = total fixed cost + total variable cost, so TVC = TC − TFC.