-The above figure shows the costs at Barney's Bagel Bakery. As the amount of output increases, the AVC curve approaches the ATC curve because the
A) TFC curve (not shown) slopes down.
B) AFC curve (not shown) slopes down.
C) MC curve is rising.
D) AVC curve is rising.

Question

-The above figure shows the costs at Barney's Bagel Bakery. As the amount of output increases, the AVC curve approaches the ATC curve because the
A) TFC curve (not shown) slopes down. 
B) AFC curve (not shown) slopes down. 
C) MC curve is rising. 
D) AVC curve is rising.

Quizplus · Accepted Answer

As output increases, the Average Fixed Cost (AFC) decreases because fixed costs are spread over more units, causing the Average Total Cost (ATC) to approach the Average Variable Cost (AVC).

-The Above Figure Shows the Costs at Barney's Bagel Bakery