The diagram was intended to illustrate the MC and AVC curves that correspond to each other.Explain why the diagram below is incorrect. 
Definitions:
Absorption Costing
An accounting system that factors in all production costs—direct labor, direct materials, and both fixed and variable manufacturing overheads—into the pricing of a product.
Cost-plus Pricing
is a pricing strategy where the selling price is determined by adding a specific markup to a product's cost.
Return on Investment
A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.
Return on Investment
A measure of the profitability of an investment, calculated as the ratio of net profits to the initial cost of the investment.
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