Asked by Giselle Gradilla on Apr 28, 2024
Verified
As output rises,the difference between the AVC and the ATC curves
A) narrows.
B) stays the same.
C) widens.
AVC
Short for Average Variable Cost, it is the total variable costs (such as labor and materials) divided by the quantity of output produced.
ATC
Stands for "Average Total Cost," which is the total cost per unit of output in economics, calculated by dividing the total cost by the quantity produced.
- Identify the behaviors of average variable cost (AVC) and average total cost (ATC) as output changes.
Verified Answer
JM
Jessa Mae RomeroMay 01, 2024
Final Answer :
A
Explanation :
As output rises, the AVC curve tends to decrease initially and then starts to increase at a certain point. However, the ATC curve tends to decrease initially and then increases at a slower pace than the AVC curve. This implies that the difference between AVC and ATC curves will narrow as output rises.
Learning Objectives
- Identify the behaviors of average variable cost (AVC) and average total cost (ATC) as output changes.