From the graph below, answer the following questions.
What will be the value APC at point B?
Answer & explanation
Correct answer: option 2
The correct answer is option 2: One
APC is \(\frac{C}{Y}\)
At point B, consumption curve intersects the 45 degree line and this is the break even point. At this point, consumption expenditure is exactly equal to income. Thus , C = Y at point B.
This means APC = \(\frac{C}{Y}\) =1.