Study the table below and answer the question.
| Output | TFC | TVC | TC |
| 0 | 20 | 0 | 20 |
| 1 | 20 | 10 | 30 |
| 2 | 20 | 18 | 38 |
| 3 | 20 | 24 | 44 |
| 4 | 20 | 29 | 49 |
| 5 | 20 | 33 | 53 |
| 6 | 20 | 39 | 59 |
What will be the AVC at zero output?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: undefined
AVC (Average Variable Cost) at zero output is 0/0. In economic terms regarding cost functions, it is considered as undefined.