Refer to the accompanying graph to answer the following questions.

-The gap between the average total cost (ATC)and average variable cost (AVC)curves represents ________ cost.

Question

Refer to the accompanying graph to answer the following questions.
 
-The gap between the average total cost (ATC)and average variable cost (AVC)curves represents ________ cost.

Quizplus · Accepted Answer

The gap between the ATC and AVC curves represents average fixed cost, which is the fixed cost per unit of output. This is because, while AVC only includes variable costs (such as labor and materials), ATC includes both variable costs and fixed costs (such as rent and utilities). Therefore, the difference between ATC and AVC must be the amount of fixed cost per unit.

Refer to the Accompanying Graph to Answer the Following Questions