Question

Give reasons for the following:

TC and TVC curves do not start from the same point.

Answer 1

TC and TVC curves do not start from the same point because TC equals TFC + TVC. TFC remains the same at all levels of output, and TVC changes with the change in output. At zero level of output, TC is equal to TFC as TVC is zero at this level of output. Thus, the difference between TC and TVC is TFC, which is never zero. Due to this, the TC and TVC curves do not start from the same point.