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Why does the difference between average cost curve and the average variable cost curve gradually decline?

Asked by Topperlearning User 25th April 2016, 1:04 PM
Answered by Expert

AC= AFC + AVC. As output increases, AFC must fall continuously because the TFC is constant. This makes the components of AFC in AC tends to reduce. Thus, the difference between the AC and AVC becomes closer.

Answered by Expert 25th April 2016, 3:04 PM
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