The average variable cost curve ?
Correct answer: B. Converges with the average cost as output increases
- A. is derived from the average fixed costs
- B. Converges with the average cost as output increases
- C. Equals the total costs divided by the output
- D. Equals revenue minus profits
Explanation
Average cost equals average variable cost plus average fixed cost. As output increases, average fixed cost approaches zero, so the average variable cost and average cost curves converge.
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