Question

why does the difference between average total cost & average variable cost decrease with the increase in output? can two become one at a very high rate of output​

Answer 1

Answer:

As we increase the level of output, the difference between ATC and AVC decreases because ATC = AFC + AVC and Total Fixed Cost remain constant at all levels of output, but with rise in level of output, AFC decreases. ... Thus, ATC and AVC can never be equal at any level of output.

Explanation:

Hope it will help you

please follow me and mark my answer as brainliest answer

Answer 2

Answer:

Solution :

As we increase the level of output, the difference between ATC and AVC decreases because ATC = AFC + AVC and Total Fixed Cost remain constant at all levels of output, but with rise in level of output, AFC decreases. That's why the difference between ATC and AVC decreases with rise in level of output.The difference between the average total cost (ATC or AC) and the average variable cost (AVC) lies due to the average fixed cost incurred by the firm. Thus, ATC and AVC can never be equal at any level of output.