Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Production and Costs

Question:

On a graph, which of the following curve cost starts from Zero?

Options:

TVC curve

AFC Curve

TFC curve

None of the above

Correct Answer:

TVC curve

Explanation:

The correct answer is option 1: TVC curve

TVC (Total Variable Cost) starts from zero.

  • At zero output, TVC = 0 because variable costs depend on production.
  • As output increases, TVC increases, forming an upward-sloping curve.

    Why not other options?

    2️⃣ AFC Curve (Option 2):

    • AFC = TFC / Q
    • Since TFC is positive, AFC is not defined at Q = 0 and does not start from zero.
    • AFC curve is, in fact, a rectangular hyperbola.

    3️⃣ TFC Curve (Option 3):

    • TFC remains constant regardless of output.
    • Even at Q = 0, TFC has a positive value, meaning it starts above zero.