Question

The vertical distance between the total cost and the total variable cost curves:
a) Decreases as output increases.
b) Increases as output increases.
c) Is equal to average fixed cost.
d) Is equal to total fixed cost.

Answer 1

The vertical distance between the total cost and the total variable cost curves is equal to total fixed cost.
This is because ATC = AFC + AVC. Therefore, AFC = ATC – AVC.