The vertical distance between a firm's total cost curve and its total variable cost curve
A)is zero
B)is negative when the firm incurs fixed costs in the short run
C)represents total fixed costs
D)represents marginal costs
E)represents average fixed costs

Question

Quizplus · Accepted Answer

The vertical distance between a firm's total cost curve and its total variable cost curve represents its total fixed costs. This is because total cost is the sum of both fixed and variable costs, and total variable cost is only the variable costs, leaving the vertical difference as the fixed costs. Therefore, C is the correct choice.

The Vertical Distance Between a Firm's Total Cost Curve and Its