Relationship between TVC & MC
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Gaurav Seth 6 years, 5 months ago
Relationship between TVC and MC:
We know, MC is addition to TVC when one more unit of output is produced. So, TVC can be obtained as summation of MC’s of all the units produced. If output is assumed to be perfectly divisible, then total area under the MC curve will be equal to TVC.
As seen in the diagram, at OQ level of output, TVC is equal to the shaded area OPLQ in the diagram.
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