The Vertical Distance Between a Firm's ATC and AVC Curves

question 443

Multiple Choice

The vertical distance between a firm's ATC and AVC curves represents

• A)AFC, which increases as output increases.
• B)AFC, which decreases as output increases.
• C)marginal costs, which decrease as output decreases.
• D)marginal costs, which increase as output increases.

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Definitions:

Common Stock

Equity ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Stock Split

A corporate action that increases the number of a company’s outstanding shares by dividing each share, which in turn reduces the price per share.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is the legal capital per share.

Market Value

The current quoted price at which an asset or service can be bought or sold in an open market.