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Cost Curves · Question 16 of 62

Question 16

MediumOriginal question

Read the two statements and choose the correct option.

I. The vertical distance between TC and TVC equals TFC at every output.

II. The vertical distance between AC and AVC equals AFC at every output.

Options for question 16

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. TC − TVC = TFC: I is true, and that gap is constant.

  2. AC − AVC = AFC: II is true, and that gap shrinks as output rises.

Concept
Gaps between the cost curves
Typical time
70 s
Your time
—
The rule this testsFixed and variable cost
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Ten questions from Cost Curves, at your own pace.

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