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Home Questions NVEWWYZTT8
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Production and Costs

Question:

Read the following statements - Assertion (A) and Reason (R):
Assertion (A): In short run, change in Total Cost occur due to change in Total Fixed Cost and Total Variable Cost.
Reason(R) : TC= TFC + TVC
From the given alternatives choose the correct one:

Options:

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

Correct Answer:

Assertion (A) is false but Reason (R) is true.

Explanation:

The correct answer is option 4: Assertion (A) is false but Reason (R) is true.

 

  • Total Cost (TC) = Total Fixed Cost (TFC) + Total Variable Cost (TVC) (Reason R is correct).
  • However, in the short run, Total Fixed Cost (TFC) remains constant, meaning any change in Total Cost (TC) occurs only due to changes in Total Variable Cost (TVC), not TFC.
  • Since Assertion (A) incorrectly states that TC changes due to both TFC and TVC in the short run, it is false.

 

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