Question

Why does difference between ATC and AVC keep on declining as output increases? Can these two be equal at some level of output? Why or why not?

Answer 1

Explanation:

An important point to note here is that although AFC keeps declining with increasing output level, but it can never become zero. This is because AFC is a rectangular hyperbola. That is, it can never touch x-axis. Thus, ATC and AVC can never be equal at any level of output.