Figure 7-10
-The average cost curve
A)is the vertical summation of the AFC and the AVC curves.
B)lies below the AVC curve.
C)lies below the AFC curve.
D)is the vertical summation of the MC and AVC curves.

Question

Figure 7-10 
-The average cost curve
A)is the vertical summation of the AFC and the AVC curves. 
B)lies below the AVC curve. 
C)lies below the AFC curve. 
D)is the vertical summation of the MC and AVC curves.

Quizplus · Accepted Answer

The average cost (AC) curve is the vertical summation of the Average Fixed Cost (AFC) and the Average Variable Cost (AVC) curves. This is because the total cost is the sum of fixed and variable costs, and the average cost is calculated by dividing the total cost by the quantity of output produced.

Figure 7-10 -The Average Cost Curve