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WAEC Economics 2025 Question 40

Question 40

Theory of Costs and Revenue

Use Figure 2 (a firm's cost curves X, Y and Z with AR = MR at price P) to answer the question. The interval between curves Y and Z represents

Diagram for this question
  1. A.average fixed cost.
  2. B.total fixed cost.
  3. C.total cost.
  4. D.average total cost.
Show the answer and explanation

Answer: A (average fixed cost.)

Explanation

ATC − AVC = AFC, so the gap between Y (ATC) and Z (AVC) is average fixed cost.