The graph of the average cost curve
A)is identical to the AVC curve.
B)is above the AVC curve
C)lies everywhere below the AFC curve.
D)lies below the AFC curve.

Question

Quizplus · Accepted Answer

Average cost (AC) curve includes both variable and fixed costs, while average variable cost (AVC) only represents variable costs. Therefore, AC curve will always be above the AVC curve.

The Graph of the Average Cost Curve