Question

The vertical distance between the total cost and the total variable cost curves differs by an amount that Group of answer choices increases as output increases. decreases as output increases. initially increases, but then decreases, as output increases. is constant as output changes.

Answer 1

Vertical distance is simply known as vertical separation. It is the distance between two vertical positions.  The vertical distance between the total cost and the total variable cost curves differs by an amount which is constant as output changes.

The vertical distance between the total cost and the total variable cost curves is known too be equal to total fixed cost.

• That is,  ATC = AFC + AVC

Total variable cost (TVC) often increases as output increases. Average fixed cost (AFC) is simply defined as the fixed costs of production (FC) and it is divided by the quantity (Q) of output produced.

Fixed costs are known as those costs that need to be incurred in fixed quantity even with the level of output produced.

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