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Economics (AS & A Level) · Oct / Nov 2021 · Paper 32 · Question 6

9708Types of cost, revenue and profit, short-run and long-run production

What are the correct formulae for calculating average cost (AC) and average revenue (AR)?

  1. AAC = TC/MC, AR = TR/MR
  2. BAC = TC/P, AR = P × Q
  3. CAC = TC/Q, AR = TR/Q
  4. DAC = TC/Q, AR = TR/P

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Correct answer: C. AC = TC/Q, AR = TR/Q

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