The sum of average variable cost and average fixed cost is known as

Correct option is B

Correct Answer: (B) Average cost

Explanation:
The sum of average variable cost (AVC) and average fixed cost (AFC) is known as the average cost (AC). This can be expressed as:

AC=AVC+AFC

• Average Variable Cost (AVC): This is the variable cost per unit of output.
• Average Fixed Cost (AFC): This is the fixed cost per unit of output.

When you add these two, you get the total average cost per unit of output, which represents the total cost per unit when both variable and fixed costs are considered.

Other Options:

• Actual cost: This term does not refer to the sum of AVC and AFC.
• Total cost: Total cost refers to the sum of total fixed costs and total variable costs, not the average costs.
• Marginal cost: Marginal cost refers to the additional cost of producing one more unit of output, which is different from average costs.