The vertical distance between the average total cost curve and the average variable cost curve equals quizlet
Average fixed cost (AFC). is the total fixed cost per unit of output. -The vertical distance between the average total cost and average variable cost curves is equal to average fixed cost. - The distance shrinks as output increases because average fixed cost declines with increasing outputs.arginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. - When marginal cost is LESS than average cost, average cost is DECREASING-When marginal cost exceeds average cost, average cost is increasing. This curve is constructed to capture the relation between average variable cost and the level of output, holding other variables, like technology and resource prices, constant. The average variable cost curve is one of three average curves. The other two are average total cost curve and average fixed cost curve.A related curve is the marginal cost curve. The average variable cost curve is U-shaped. Average variable cost is relatively high at small quantities of output, then as production increases, it declines, reaches a minimum value, then rises.he average variable cost curve is one of three average curves. The other two are average total cost curve and average fixed cost curve. A related curve is the marginal cost curve. The average variable cost curve is U-shaped. First, note that the distance separating the average total cost curve and the average variable cost curve is relatively wide for small quantities of output, but narrows with greater production. The reason for the narrowing gap is that the difference between the two curves is average fixed cost.his results because: (1) marginal cost intersects each average curve at its minimum value, (2) the marginal cost curve has a positive slope, and (3) there is a gap between the two average curves, which is average fixed cost. If marginal cost is greater than average total cost, then average total cost is rising. The vertical distance between the short-run average total and average variable cost curves is equal to marginal cost.he level of output at which the average product of a variable input is at a maximum corresponds to the level of output where short-run average total cost is at a minimum. All costs are variable costs in the long run. The long-run total cost curve is derived from the firm's expansion path. The short-run marginal cost (MC) curve will at first decline and then will go up at some point, and will intersect the average total cost and average variable cost curves at their minimum points.he average variable cost (AVC) curve will go down (but will not be as steep as the marginal cost), and then go up. This will not go up as fast as the marginal cost curve. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline. (Answer #2). Average variable cost (AVC) and average total cost (ATC) curves get closer to each other as the total output (Q) increases only when the cost follows a definite pattern as the Q is varied. Typically the total cost of production can be divided in two components, fixed cost (FC) and variable cost (VC).Answer #2). Average variable cost (AVC) and average total cost (ATC) curves get closer to each other as the total output (Q) increases only when the cost follows a definite pattern as the Q is varied. Typically the total cost of production can be divided in two components, fixed cost (FC) and variable cost (VC). Marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. - When marginal cost is LESS than average cost, average cost is DECREASING-When marginal cost exceeds average cost, average cost is increasing.arginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. - When marginal cost is LESS than average cost, average cost is DECREASING-When marginal cost exceeds average cost, average cost is increasing. Thus marginal cost initially falls, reaches a minimum value and then increases. The marginal cost curve intersects both the average variable cost curve and (short-run) average total cost curve at their minimum points.When the marginal cost curve is above an average cost curve the average curve is rising.hus marginal cost initially falls, reaches a minimum value and then increases. The marginal cost curve intersects both the average variable cost curve and (short-run) average total cost curve at their minimum points. When the marginal cost curve is above an average cost curve the average curve is rising. B. occur when average marginal costs are lower than average fixed costs. C. refer to the increase in output that results from the increased utilization of a single input. D. imply that the average total cost curve will fall continuously as output increases in the short run.. Average fixed cost must be increasing. D. Average fixed cost must be less than average variable cost. A. ng1095. Answered in ECO 2301. When economies of scale exist, an increase in the level of output will lead to: A. a decrease in cost per unit. B. an increase in cost per unit. C. a decrease in total cost. If the long-run average cost curve slopes upward over some range of output, then the firm is experiencing increasing returns to scale over that range of output. The point of inflection of the short-run total variable cost function corresponds to the level of output where marginal cost is at a minimum.he level of output at which the average product of a variable input is at a maximum corresponds to the level of output where short-run average total cost is at a minimum. All costs are variable costs in the long run. The long-run total cost curve is derived from the firm's expansion path.
No