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Basic Question 13 of 29
When production increases, the average variable cost and average total cost curves ______.
B. become horizontal
C. cross
D. move closer together
A. spread further apart
B. become horizontal
C. cross
D. move closer together
User Contributed Comments 3
| User | Comment |
|---|---|
| Mariecfa | The vertical distance between ATC and AVC curves is equal to AFC. |
| fangluez | ATC=AFC+AVC. As units of output increase, AFC will decrease. Therefore ATC and AVC are moving closer. |
| Huricane74 | When production increases, but before the average fixed cost and the average variable cost curves intersect, they move closer together. If production continues to increase after the average fixed cost and average variable curves intersect, then they move further apart. |
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Learning Outcome Statements
determine and interpret break even and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition
CFA® 2024 Level I Curriculum, Volume 1, Module 1.