What is the shape of the AFC curve and why does it have this shape?
What will be an ideal response?
Average fixed cost (AFC) equals total fixed cost divided by total product. As the quantity produced increases, the fixed costs are spread over a larger and larger quantity of output so average fixed cost decreases. So the AFC curve slopes downward as the quantity produced increases.
Economics
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If there is no change in equilibrium price after a $1 per unit tax is imposed on suppliers, demand must be perfectly inelastic
a. True b. False
Economics
Decision makers who try their best for rationality but are constrained by limited information and processing abilities are referred to as:
a. irrational. b. partially rational. c. boundedly rational. d. perfectly rational.
Economics