The total cost curve:
A)is the sum of the variable cost curve and fixed cost curve.
B)is parallel to the variable cost curve.
C)always lies above the variable cost curve.
D)All of these are correct.

Question

Quizplus · Accepted Answer

The total cost curve represents the total cost of production, which includes both fixed and variable costs. Therefore, it is the sum of the variable cost curve and the fixed cost curve (A), is parallel to the variable cost curve because fixed costs do not change with output, making the distance between the total cost curve and variable cost curve constant (B), and always lies above the variable cost curve because it includes fixed costs in addition to variable costs (C).

The Total Cost Curve