The distance between AVC and AFC curves tends to reduce as output increases.

Question

Write your comment of the statement in a sentence or two:

The distance between AVC and AFC curves tends to reduce as output increases.

Answer 1

No, it is not true. Initially as output increases the distance between AVC and AFC curves may tend to reduce but once the two curves cross each other (as in the diagram), the difference between the two tends to increase. Because, while AVC tends to rise after a certain level of output, AFC continuously falls.