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Asked by Aliya leblanc on Jun 13, 2024

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The average-fixed-cost curve is always declining. How does this affect the relationship between the AVC and ATC curves?

Average-Fixed-Cost Curve

A graphical representation showing how the fixed cost per unit changes with changes in the volume of production.

AVC Curve

The Average Variable Cost (AVC) curve represents how the per-unit variable cost of production changes as the quantity of output changes.

ATC Curve

The average total cost curve, which plots the per-unit total cost of producing goods at different levels of output.

  • Ascertain the link between fixed costs, variable costs, average costs, and their variations with changes in output levels.
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AB
Andrea BlackJun 19, 2024
Final Answer :
ATC = AVC + AFC, so the vertical distance between the AVC and ATC curves is the value of AFC for that level of output. Both AVC and ATC are typically U-shaped. The vertical distance between the two curves is steadily declining as output increases because AFC is steadily declining. Said another way, the two curves move closer together as output increases.

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