O 1252016 1155 PM A 8820 1222016 1046 PM Gradeboc Print Calc

O 1/25/2016 11:55 PM (A 8.8/20 1/22/2016 10:46 PM Gradeboc Print Calculator l Periodic Table Question 18 of 22 sapling learning Graph B Graph A Each graph below illustrates MC MC P three short run cost curves for firms, where ATC is Average Total Cost (aka Average Cost), AVC MC is Marginal Cost, and AVC Cost ATC is Average Variable Cost. ATC AVC Please sort the graphs as valid or invalid based on what you Output Output know about the relationships Graph C Graph D between these curves. Valid Invalid AVC ATC AVC. Output output Graph D) Graph F Graph F Graph E Graph A Graph C MC Graph B Graph E ATC ATC Cost AVC Output Output AO Previous Give Up & View solution Check Answer Next Exit Hint

Solution

Only graph B and F are valid rest are all invalid.The MC curve intersects both the ATC and the AVC curve at their minimum points.However since ATC also includes AFC hence its minimum point lies to the right of the minimum point of the AVC curve .Also the distance between the AVC and AC curve represents the AFC which goes on diminishing as the output level increases , thus the distance between the 2 keeps on diminishing. These characteristics are truly depicted by graphs B and F hence only those 2 are valid rest all invalid.