Use the figure below to answer the following questions. Figure 10.3.2
-Refer to Figure 10.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?
A)Average fixed cost decreases with output.
B)The vertical gap between curves B and C is equal to average variable cost.
C)Line B comes closer to line C as output increases because of a decrease in average fixed cost.
D)Curve D is the marginal cost curve.
E)The vertical gap between curves B and C is equal to average fixed cost.

Question

Use the figure below to answer the following questions.  Figure 10.3.2
-Refer to Figure 10.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?
A)Average fixed cost decreases with output. 
B)The vertical gap between curves B and C is equal to average variable cost. 
C)Line B comes closer to line C as output increases because of a decrease in average fixed cost. 
D)Curve D is the marginal cost curve. 
E)The vertical gap between curves B and C is equal to average fixed cost.

Quizplus · Accepted Answer

The vertical gap between curves B and C represents average fixed cost, not average variable cost. This is because curve B represents average total cost and curve C represents average variable cost; the difference between total cost and variable cost is fixed cost.

Use the Figure Below to Answer the Following Questions