At zero level of output, which of the following will be undefined?

The correct answer is option 4: All of above

Explanation:

At zero level of output, the following cost measures become undefined because they involve division by zero:

1. Average Fixed Cost (AFC) and Average Variable Cost (AVC)

   • Formula:
   • AFC=TFC/Q,
   • AVC=TVC/Q
   • Since Q = 0, division by zero occurs, making AFC and AVC undefined.

2. Short-Run Marginal Cost (SMC)

   • Formula: SMC=ΔTC/ΔQ
   • If output is zero, marginal cost cannot be calculated because there is no additional unit of output to compare changes in total cost.

3. Short-Run Average Cost (SAC)

   • Formula: SAC=TC/Q
   • Since Q = 0, division by zero occurs, making SAC undefined.