3 Within the relevant range of production average variable c

3, Within the relevant range of production, average variable cost per unit will tend A. remain relatively constant B. vapy inversely with the level of production D. be greater than fixed cost per unit directly with the level of production E. be less than fixed cost per unit

Solution

Within the relevant range of production, average variable cost per unit will tend to be greater than the fixed cost per unit. Hence the correct answer is (E) i.e less than fixed cost per unit. Since the AVC curve is U-shaped, the first three options are incorrect. Apart from the first few units of production, option (D) is also incorrect. Hence the correct answer is (E).