The following graph shows average fixed costs, average variable costs, average total costs, and marginal costs of production. Why does the distance between curves II and III get smaller as quantity increases?
A) Marginal cost is increasing.
B) Average variable cost is increasing.
C) Average fixed cost is declining.
D) Average fixed cost is increasing.

Question

The following graph shows average fixed costs, average variable costs, average total costs, and marginal costs of production.  Why does the distance between curves II and III get smaller as quantity increases?
A) Marginal cost is increasing. 
B) Average variable cost is increasing. 
C) Average fixed cost is declining. 
D) Average fixed cost is increasing.

Quizplus · Accepted Answer

The Answer of The following graph shows average fixed costs, average variable costs, average total costs, and marginal costs of production.  Why does the distance between curves II and III get smaller as quantity increases?
A) Marginal cost is increasing. 
B) Average variable cost is increasing. 
C) Average fixed cost is declining. 
D) Average fixed cost is increasing.

The Following Graph Shows Average Fixed Costs, Average Variable Costs