6.
We know that
Average Variable Cost (AVC)
is just Total Variable Cost divided by output. If we know
AVC
and output
(Q* in this case)
then Total Variable Cost is just
AVC
x Q*
or area
0DEQ*
shown in purple in section
(4)
.
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6. We know that Average Variable Cost (AVC) is just Total Variable Cost divided by output. If we know AVC and output (Q* in this case) then Total Variable Cost is just AVC x Q* or area 0DEQ* shown in purple in section (4).
