Page 2 - HA-COST
P. 2

-AFC: Per unit cost of fixed factor


























               -AVC: Per unit cost of variable factor























               -MC: is the addition to the TC as one more unit of output is produced

                                                           OR


               MC is the change in TC when an additional unit of output is produced.

























               -Relationship among AC, AFC and AVC-

               1. AC is a U-shaped curve. It is due to the application of the law of variable
               proportions.
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