Match the short-run cost concepts in List I with their corresponding mathematical definiti… — JAMB UTME

Match the short-run cost concepts in List I with their corresponding mathematical definitions or behavioral characteristics in List II.

Marginal Cost ( $MC$ )Addition to total cost resulting from producing one additional unit ( $\frac{\Delta TC}{\Delta Q}$ )
Average Fixed Cost ( $AFC$ )Continuously declines as total output increases ( $\frac{TFC}{Q}$ )
Average Variable Cost ( $AVC$ )Variable expense per unit of output produced ( $\frac{TVC}{Q}$ )
Total Fixed Cost ( $TFC$ )Remains constant in total magnitude regardless of the output level

Answer

Marginal Cost (

MC

) matches with the addition to total cost resulting from producing one additional unit (

\frac{\Delta TC}{\Delta Q}

); Average Fixed Cost (

AFC

) matches with continuously declining as total output increases (

\frac{TFC}{Q}

); Average Variable Cost (

AVC

) matches with variable expense per unit of output produced (

\frac{TVC}{Q}

); Total Fixed Cost (

TFC

) matches with remaining constant in total magnitude regardless of the output level.

Each short-run cost concept correctly aligns with its economic definition and formula: Marginal Cost measures the incremental cost of producing one more unit, Average Fixed Cost decreases continuously as output increases, Average Variable Cost measures per-unit variable costs, and Total Fixed Cost stays unchanged regardless of output levels.

Step-by-Step Solution

Identify the definition of Marginal Cost (

MC

)

MC = \frac{\Delta TC}{\Delta Q}

Marginal cost measures the incremental increase in total cost resulting from producing one additional unit of output.

Analyze the behavior of Average Fixed Cost (

AFC

)

AFC = \frac{TFC}{Q}

, which falls as

Q

expands.

Because total fixed cost is constant, dividing it by an increasing quantity produces a continuously decreasing value.

Identify the formula for Average Variable Cost (

AVC

)

AVC = \frac{TVC}{Q}

Average variable cost isolates variable expenditure per unit of output.

Define Total Fixed Cost (

TFC

)

TFC

is invariant to production level.

Fixed costs are incurred even at zero output and do not alter with changes in short-run production.

Key Concept

Short-run cost concepts, formulas, and behavioral curves

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