# The vertical distance between a firm's average total cost curve, ATC, and its average variable...

## Question:

The vertical distance between a firm's average total cost curve, ATC, and its average variable cost curve, AVC,

A. is equal to its average product.

B. is equal to its marginal cost, MC.

C. decreases as output increases.

D. is equal to its total fixed cost, TFC.

## Average Fixed Cost:

Mathematically, the Average Fixed Cost is the ratio of the total fixed cost of the product and the total quantity produced by the firm. In other words, it is known as a fixed cost per unit of output.

## Answer and Explanation: 1

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View this answer- The correct option is
**C. Decreases as output increases**.

We know that

AFC = ATC - AVC where AFC = Average fixed cost, ATC = Average total cost and AVC...

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Chapter 3 / Lesson 14What is a fixed cost? Learn the fixed cost definition and how to calculate it using the fixed cost formula. Compare fixed vs. variable costs and see fixed costs examples in business.

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