The distance between the average total cost curve and the average variable cost curve decreases as output increases.

Name: The distance between the average total cost curve and the average variable cost curve decreases as output increases.
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Question

Quizplus · Accepted Answer

As output increases, the fixed costs get spread over a larger number of units, leading to a smaller impact on the average total cost. Therefore, the distance between the average total cost curve and the average variable cost curve decreases.

The Distance Between the Average Total Cost Curve and the Average