#cfa-level-1 #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit #study-session-4
This shows the cost curve relationships among ATC, AVC, and AFC in the short run.
The difference between ATC and AVC at any output quantity is exactly equal to the amount of AFC.
Both ATC and AVC take on a bowl-shaped pattern in which each curve initially declines, reaches a minimum-cost output level, and then increases.
Point S, which corresponds to QAVC, is the minimum point on the AVC .
Point T, which corresponds to QATC, is the minimum point on ATC.
When output increases, average fixed cost declines as AFC approaches the horizontal quantity axis.
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