What are afc avc and ac of a firm? How are they related?
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Relationship between AC and AVC and between AC and MC 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.
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