In the short run,and with nonzero fixed costs,the average total cost curve always lies above the average variable cost curve.

Question

Quizplus · Accepted Answer

This is because the average total cost includes both the variable and fixed costs, while the average variable cost only includes the variable costs. Therefore, the average total cost curve will always be higher than the average variable cost curve as long as there are nonzero fixed costs.

In the Short Run,and with Nonzero Fixed Costs,the Average Total