AVC curve cannot touch AC(ATC) curve because ______.

Question

KollegeApply · Accepted Answer

AVC curve cannot touch AC(ATC) curve because AFC is always positive. Explanation: • AVC (Average Variable Cost) + AFC (Average Fixed Cost) = AC (Average Cost or ATC). • The AVC curve can never touch or cross the AC curve since the AFC is always positive (although it decreases as output rises). • AFC is the difference between AC and AVC, and since AFC > 0, AVC will always be lower than AC.

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