The Vertical Distance Between Average Total Cost and Average Variable

question 121

Multiple Choice

The vertical distance between average total cost and average variable cost curves decreases as output increases because

• A)it is traditional to draw the curves that way.
• B)marginal cost first falls and then rises.
• C)in geometry, both curves must reach their minimums on the marginal cost curve.
• D)marginal product first rises and then falls.
• E)average fixed cost decreases as output increases.

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Definitions:

Marginal Value

The extra benefit or pleasure derived from using or making an additional unit of a product or service.

Demand Curves

Graphs that illustrate the relationship between the price of a good and the quantity demanded by consumers at those prices.

Price Discriminate

A practice where a seller charges different prices to different customers for the same product or service, often based on the willingness to pay.

Revenue

The total income generated from the sale of goods or services related to a company's primary operations.