The Vertical Distance Between a Firm's Total Cost (TC) and Its

question 88

Multiple Choice

The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves

• A) decreases as output decreases.
• B) is equal to the average variable cost, AVC.
• C) is equal to the total fixed cost, TFC.
• D) is equal to the marginal cost, MC.

---

Definitions:

Economies Of Scale

The cost advantage achieved by producing goods in large quantities, hence reducing the cost per unit.

Quality Of Products

Refers to the degree to which a product or service meets or exceeds customer expectations in terms of durability, reliability, and performance.

Production Costs

The expenses directly associated with the manufacturing of goods or services, including materials, labor, and overhead.

Economies Of Scale

The cost advantage that arises with increased output of a product, where the average cost per unit decreases as the scale of production expands.