Answered: The vertical distance between ATC and…

The vertical distance between ATC and AVC measures: a. marginal cost. b. total fixed cost. c. average fixed cost. d. economic profit per unit.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section: Chapter Questions

Problem 3WNG

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Question

The vertical distance between ATC and AVC measures:

a. marginal cost.

b. total fixed cost.

c. average fixed cost.

d. economic profit per unit.

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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