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Explain the shape of a firm’s short-run average and marginal cost curves.

Answers

-In the short run, the firm incurs cost on fixed factors and variable factors are known as fixed cost while cost on variable factors are known as variable cost.
This implies that:

TC = TFC + TVC
TFC - total fixed cost
TVC - total variable cost
TFC does not vary with variation in the output between zero and a certain level of output.

*Concept of average and marginal costs

marlinbito answered the question on July 6, 2018 at 08:49

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