Relationship Between AC, AFC, AVC and MC
1. The Average Fixed Cost curve (AFC) starts from a height and goes on declining continuously as production increases.
2. The Average Variable Cost curve, Average Cost curve and the Marginal Cost curve start from a height, reach the minimum points, then rise sharply and continuously.
3. The Average Fixed Cost curve approaches zero asymptotically. The Average Variable Cost curve is never parallel to or as high as the Average Cost curve due to the existence of positive Average Fixed Costs at all levels of production; but the Average Variable Cost curve asymptotically approaches the Average Cost curve from below.
4. The Marginal Cost curve always passes through the minimum points of the Average Variable Cost and Average Cost curves, though the Average Variable Cost curve attains the minimum point prior to that of the Average Cost curve.
Read more about this topic: Average Cost
Famous quotes containing the words relationship between and/or relationship:
“Living in cities is an art, and we need the vocabulary of art, of style, to describe the peculiar relationship between man and material that exists in the continual creative play of urban living. The city as we imagine it, then, soft city of illusion, myth, aspiration, and nightmare, is as real, maybe more real, than the hard city one can locate on maps in statistics, in monographs on urban sociology and demography and architecture.”
—Jonathan Raban (b. 1942)
“The relationship between mother and professional has not been a partnership in which both work together on behalf of the child, in which the expert helps the mother achieve her own goals for her child. Instead, professionals often behave as if they alone are advocates for the child; as if they are the guardians of the child’s needs; as if the mother left to her own devices will surely damage the child and only the professional can rescue him.”
—Elaine Heffner (20th century)