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Question
With increase in output, the difference between AC curve and AVC curve ______.
Options
increases
decreases
remains constant
none of these
MCQ
Fill in the Blanks
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Solution
With increase in output, the difference between AC curve and AVC curve decreases.
Explanation:
The difference between average cost and average variable cost is average fixed cost. AFC falls as output increases, so the gap between AC and AVC decreases.
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