MACROECONOMICS

Macroeconomics

Macroeconomics

1-Define total and variable costs. Derive total average, total average variable and total average fixed cost. Show all of these costs graphically.

The total costs incurred in the operation of an enterprise during a given period are determined by adding fixed and variable costs, expressed this relationship as follows:

TOTAL COST = FIXED COSTS + VARIABLE COSTS

The fixed cost is independent of the level of production; the firm must take whatever the level of its activity, including termination of activity. It may be, for example the repayment of a loan, or pay royalties on a patent that was granted for a period ...