Other things being equal, if the average fixed cost curve shifts upward at all output levels
A) the marginal cost curve shifts upward at all output levels.
B) the average variable cost curve shifts upward at all output levels.
C) the average total cost curve remains unchanged at all output levels.
D) the vertical distance between the average total cost curve and the average variable cost curve increases at all output levels.

Question

Quizplus · Accepted Answer

The average fixed cost (AFC) is a component of the average total cost (ATC), which is the sum of the average fixed cost and the average variable cost (AVC). If the AFC increases, the ATC also increases because the AVC remains unchanged. This results in a larger vertical distance between the ATC and AVC curves at all output levels, as the increase in AFC is reflected in the ATC but does not affect the AVC.

Other Things Being Equal, If the Average Fixed Cost Curve