Question

What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?

Answer 1

We know that

TC = TFC + TVC

Dividing both the side by'Q',we get

`(TC)/Q=(TFC)/Q+(TVC)/Q`

ATC = 0 AVC, here TFC = 0

Therefore, ATC = AVC

These cost curves will intersect each other.