The vertical distance between a firm's ATC and AVC curves represents:

A) AFC,which increases as output increases.
B) AFC,which decreases as output increases.
C) marginal costs,which decrease as output decreases.
D) marginal costs,which increase as output increases.

ATC

Average Total Cost, a financial metric calculated by dividing total cost by the quantity of output produced, illustrating the average cost per unit of output.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output produced.

AFC

Average Fixed Cost, the fixed cost per unit of output, calculated by dividing total fixed costs by the quantity produced.