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Shapes of Average and Marginal Cost Curves in the Short Run

The differenc...

Question

The difference between Average Total Cost and Average Variable Cost is .

A

increasing

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B

TFC

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C

AFC

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D

constant

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Solution

The correct option is C AFC
The difference between AC and AVC is Average Fixed Cost (AFC). AFC reduces as output increases.

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Shapes of Average and Marginal Cost Curves in the Short Run

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