Why does the vertical distance between AC curve and AVC curve graduall – InterviewSolution

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1.	Why does the vertical distance between AC curve and AVC curve gradually decline ?
Answer» The vertical distance between AC and AVC ( costs such as wages or cost of supplies) curves continues to fall with increase in output because the gap between them is AFC, which continues to decline with rise in output.Due to the Law of Variable Proportions both AC and AVC curves are U- shaped.

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