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MICROECONOMICS CH : 8 CONCEPTS OF COST — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 8 CONCEPTS OF COST1 Mark
Question
Following increase in output, the reducing difference between average total cost and average variable cost ultimately becomes zero.
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Answer

False. As output increases, the difference between average total cost and average variable cost reduces but can never be zero. The difference is equal to AFC (average fixed cost) which must remain positive, even when it is falling.

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