Unformatted text preview: how much or how little it produces. One example might be the monthly rent on a store. Added together, TVC and TFC are equal to TC: TVC + TFC = TC TVC and TFC, when divided by q, yield average variable cost (AVC) and average fixed cost (AFC): AVC = TVC/q AFC = TFC/q Added together, AVC and AFC are equal to AC: AVC + AFC = AC We can also find the marginal variable cost (MVC) and the marginal fixed cost (MFC) by taking the slopes of the two curves. Because fixed costs don't change with quantity, however, the MFC will be 0: MVC = (change in TVC)/(change in q) MFC = (change in TFC)/(change in q) = 0...
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This note was uploaded on 12/13/2011 for the course ECO 1320 taught by Professor Staff during the Fall '11 term at Texas State.
- Fall '11