Final answer:
The vertical distance between the AVC and ATC will get smaller as output expands beyond the break-even point.
Step-by-step explanation:
The vertical distance between the Average Variable Cost (AVC) and Average Total Cost (ATC) is an important concept in economics. AVc represents the average cost of producing each unit of output, while ATC represents the average cost per unit of output including both fixed and variable costs. As output expands beyond the break-even point, the vertical distance between AVC and ATC will get smaller.
This happens because as a firm expands production, it benefits from economies of scale leading to lower costs per unit of output. Therefore, the gap between AVC and ATC decreases as output increases, and the firm becomes more efficient.