Shapes of Average and Marginal Cost Curves in the Short Run
The distance ...
Question
The distance between SAC and AVC as output rises.
A
decreases
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B
becomes zero
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
remains constant
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
increases
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution
The correct option is A decreases The distance between SAC and AVC is simply the AFC. AFC reduces as output increases. Thus, the gap between the two curves also reduces.