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WAEC Economics 1995 Question 17

Question 17

Theory of Costs and Revenue

If AC = Average Cost of production, FC = Fixed Cost of production, VC = Variable Cost of production, and TC = Total Cost of production, then

  1. A.VC = TC/FC
  2. B.VC = FC + AC
  3. C.VC = TC − AC
  4. D.VC = TC − FC
  5. E.VC = (TC − FC)/VC
Show the answer and explanation

Answer: D (VC = TC − FC)

Explanation

TC = FC + VC, so VC = TC − FC.