In the diagram, A represents a firm's _____ curve, B represents its _____ curve, and C represents its _____ curve.

Question

BlackTom AI · Accepted Answer

Take a careful look at what each labeled curve typically represents in cost diagrams. 
Option a: 'average total cost; marginal cost; average variable cost' assigns A to average total cost, B to marginal cost, and C to average variable cost. In standard cost diagrams, the B curve is usually either average variable cost or marginal cost depending on the context, but the order here swaps marginal and average variable in a way that does not align with how the three curves are usually labeled together (A, B, C) for concise identification. This misordering makes this option unlikely.
Option b: 'average variable cost; average total cost; marginal cost' would place B as average total cost and C as marginal cost. If A is average variable cost, B being average total cost is inconsistent with the typical pairing where the first letter A corresponds to the firm’s average total cost when the diagram labels follow a standard sequence; moreover the index ordering doesn’t match the usual cost curve ranking where ATC is typically drawn above AVC at many outputs but not in this swapped arrangement.
Option c: 'average total cost; average variable cost; marginal cost' assigns A to average total cost, B to average variable cost, and C to marginal cost. This is a common, sensible arrangement in many textbooks: A represents ATC (the U-shaped curve combining AFC and AVC), B represents AVC (the more tightly curved U that lies below ATC for many outputs), and C represents MC (the typically upward-sloping curve crossing AVC and ATC at their minimum points). The three curves are distinct and labeled in a way that matches standard practice in many diagrams.
Option d: 'average variable cost; marginal cost; average total cost' would set A as AVC, B as MC, and C as ATC. While plausible in some contexts, this ordering is less conventional for the trio of curves in a single diagram and contradicts the common labeling where ATC is presented first, followed by AVC and MC. This makes it less likely to be the intended version of the diagram.
Option e: 'marginal cost; average total cost; average variable cost' would put MC first, ATC second, AVC third. This sequence is not a standard labeling in most standard cost-curve diagrams, where ATC and AVC are the primary two U-shaped curves and MC is the separate upward-connected curve. The unconventional order here makes this option incorrect in typical conventions.
Option f: 'marginal cost; average variable cost; average total cost' places MC first, AVC second, and ATC third. This arrangement is also atypical; MC is usually drawn alongside the ATC and AVC rather than preceding them in labeling order, so this choice conflicts with the usual depiction.
In summary, among all options, option c presents the most consistent and standard assignment: A equals average total cost, B equals average variable cost, and C equals marginal cost. The other options reorder the three cost curves in ways that diverge from the common convention used in teaching materials and cost diagrams, leading to incorrect mappings.

ECC2000 - ECC5900 - S2 2025 Sample final exam

In the diagram, A represents a firm's ___ curve, B represents its _ curve, and C represents its ___ curve.

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