Which of the following explains why the average variable cost and average total cost curves converge as output increases?
A) average fixed cost becomes smaller
B) average fixed cost becomes larger
C) marginal cost becomes smaller
D) marginal cost becomes larger

Question

Quizplus · Accepted Answer

As output increases, the average fixed cost diminishes because the fixed costs are spread over a larger number of units, which causes the average variable cost and average total cost curves to converge.

Which of the Following Explains Why the Average Variable Cost