Graph A Graph D Each graph below illustrates three short run cost curves for fir

Question

Graph A Graph D Each graph below illustrates three short run cost curves for firms, where ATC is Average Total Cost (aka Average Cost) MC is Marginal Cost, and AVC is Average Variable Cost MC MC AVC Cost Cost ATC ATC AVC Please sort the graphs as valid or invalid based on what you know about the relationship:s between these curves Output Output Graph B Graph E Valid Invalid MC MC AVC ATC Cost Cost ATC AVC Output Graph DGraphC Graph FGraph EB Graph E Graph A raph COutput Graph F MC MC ATC ATC Cost Cost AVC AVC Output Output

Explanation / Answer

A is invalid because AVC is higher than ATC whoch cannot possible because ATC=AFC+AVC and AFC is always positive.

Both B and C is also invalid because gap between ATC and AVC is AFC whoch cannot increased as Q increases.

Graph D is valid and F is also valid

E is invalid because ATC and AVC cant intersect.

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