Question

Why is TC - TVC always a constant value?

Answer 1

Answer:

The vertical distance between TC and TVC always remains the same due to constant TFC. Like TVC curve, TC curve is also inversely S-shaped, due to the Law of Variable Proportions. The change in TC is entirely due to TVC as TFC is constant at all levels of output, TC = TFC at zero output as variable cost is zero.

TC and TVC curves are parallel to each other and the vertical distance between them remains the same at all levels of output because the gap between them represents TFC, which remains constant at all levels of output.