The correct answer is option 1: Yes
Here's why:
- Average Variable Cost (AVC): AVC is calculated as Total Variable Cost (TVC) divided by the quantity of output (Q): AVC = TVC / Q.
- Marginal Cost (MC): MC is the change in TVC resulting from producing one additional unit of output.
- TVC: TVC is the sum of all marginal costs up to that level of output.
- Therefore, AVC = (Sum of MC) / Q, which means AVC is the average of all marginal costs up to that level of output.
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