At higher levels of output average total cost curve and average variable cost curve come closer because :

CA Foundation · Business Economics · PYQS · September 2024
At higher levels of output average total cost curve and average variable cost curve come closer because :
(A) A. Average variable cost remains constant.
(B) B. Average fixed cost remains constant.
(C) C. Average fixed cost accounts for relatively smaller percentage of average total cost.
(D) D. Average variable cost accounts for relatively smaller percentage of average total cost.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Average fixed cost accounts for relatively smaller percentage of average total cost.

Topics: Theory of Production and Cost

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