Why lowest point of atc is at higher output level compared to avc?
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As compared to AVC, ATC/ AC falls at a greater output level or in other words we can say that the minimum point of AC curve is to the right of AVC curve. The minimum point of AC is to the right of minimum point of AVC indicating that AC reaches its minimum point much later than the minimum point of AVC. This is because of the fact that AC comprises of both the Average Fixed Cost and Average Variable Cost. Once AVC reaches its minimum, it starts rising. However, the initial rise in AVC is offset by the falling AFC such that AC still falls. it is only when the rise in AVC dominates over the fall in AFC that AC starts rising.
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As compared to AVC, ATC/ AC falls at a greater output level or in other words we can say that the minimum point of AC curve is to the right of AVC curve. The minimum point of AC is to the right of minimum point of AVC indicating that AC reaches its minimum point much later than the minimum point of AVC. This is because of the fact that AC comprises of both the Average Fixed Cost and Average Variable Cost. Once AVC reaches its minimum, it starts rising. However, the initial rise in AVC is offset by the falling AFC such that AC still falls. it is only when the rise in AVC dominates over the fall in AFC that AC starts rising.
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