Different Cost Curves - SS2 Economics Past Questions and Answers - page 1
Which cost curve represents the variable cost per unit of output?
AVC
AFC
ATC
MC
Which cost curve represents the fixed cost per unit of output?
AVC
AFC
ATC
MC
Which cost curve represents the total cost per unit of output?
AVC
AFC
ATC
MC
Which cost curve represents the additional cost of producing one more unit of output?
AVC
AFC
ATC
MC
What is the relationship between the AVC and ATC curves?
When AVC is increasing, ATC is also increasing, but at an increasing rate. This is because the variable cost per unit is increasing, which raises the average total cost.
What is the relationship between the ATC and MC curves?
The MC curve intersects the ATC curve at its lowest point. When MC is greater than ATC, ATC is increasing. This is because the marginal cost of producing an additional unit is greater than the average total cost, which means that adding another unit increases the average cost.