Question

Show Mathematically that AVC and MC are inversely related with AP and MP of the variable input respectively

Answer 1

Answer:

AVC is obtained by dividing the total variable cost by output, i.e., AVC = TVC/Q. Thus, AVC is a part of AC, given AC = AFC + AVC. Furthermore, both the AVC and AC curves are U-shaped due to the operation of the law of variable proportions.