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The gap between the average total cost (ATC) and average variable cost (AVC) curves represents the average fixed cost.

What is the average fixed cost (AFC)?

The average fixed cost is the fixed costs of production (FC) divided by the production quantity (Q).

The fixed costs refer to the cost element that does not vary with the units of production but remains fixed in its total amount within the relevant range.

The AFC = ATC - AVC

Where:

  • AFC = Average fixed cost
  • ATC = Average total cost
  • AVC = Average variable cost.

Thus, the gap between the average total cost (ATC) and average variable cost (AVC) curves represents the average fixed cost.

Learn more about average fixed cost at https://brainly.com/question/13136630

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