Multiple choice

Which of the following statements is correct concerning the relationship among the firm's functions?

  1. TC = TFC - TVC

  2. TVC = TFC - TC

  3. TFC = TC - TVC

  4. TC = TVC - TFC
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Total Cost (TC) = Total Fixed Cost (TFC) + Total Variable Cost (TVC). Therefore, TFC = TC - TVC. Option C is mathematically correct. Option A incorrectly subtracts, Option B is the wrong rearrangement, and Option D has the subtraction reversed. This is basic cost accounting.

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