In a figure showing the average total cost curve and the average variable cost curve,the vertical distance between the two curves is equal to the
A) marginal cost.
B) average fixed cost.
C) total fixed cost.
D) total variable cost.
E) average marginal cost.

Question

Quizplus · Accepted Answer

The vertical distance between the average total cost curve and the average variable cost curve represents the average fixed cost. This is because the average total cost is the sum of average fixed cost and average variable cost. Therefore, by subtracting the average variable cost from the average total cost, we get the average fixed cost, which is represented by the vertical distance between the two curves.

In a Figure Showing the Average Total Cost Curve and the Average