Refer to Figure 21.3.The vertical difference between the total cost curve and the total fixed cost curve represents
A)Total variable costs.
B)Total marginal costs.
C)Average fixed costs.
D)Average variable costs.

Question

Refer to Figure 21.3.The vertical difference between the total cost curve and the total fixed cost curve represents 
A)Total variable costs. 
B)Total marginal costs. 
C)Average fixed costs. 
D)Average variable costs.

Quizplus · Accepted Answer

The vertical difference between the total cost curve and the total fixed cost curve represents the total variable costs. This is because total fixed costs remain constant regardless of the level of output, while total variable costs increase as output increases. Therefore, the difference between the two curves represents the variable costs.