The Vertical Distance Between the Average Total Cost Curve and the Average

question 46

True/False

The vertical distance between the average total cost curve and the average variable cost curve at any given output level equals average fixed cost at that particular output level.

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Definitions:

Production Possibilities Frontier

The production possibilities frontier (PPF) is a curve depicting all maximum output possibilities for two or more goods, given a set of inputs.

Opportunity Cost

The value of the next best alternative that is forgone as a result of making a particular choice.

Inputs

In economics, inputs are the resources used in the production of goods and services, such as labor, materials, and capital.

Trade-off

A situation where making a decision to gain one thing requires sacrificing another.