What is the shape of the average fixed cost (AFC) curve?
A. U-shape
B. Horizontal up to a point and then rising
C. Sloping down towards the right
D. Rectangular hyperbola
Answer: Option D
Solution(By Examveda Team)
Rectangular hyperbola is the shape of the average fixed cost (AFC) curve. The AFC curve is a rectangular hyperbola in the sense that all rectangles formed by AFC are of equal sizes.Join The Discussion
Comments ( 1 )
The capital that is consumed by an economy or a firm in the production process is known as
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Who propounded the opportunity cost theory of international trade?
A. Ricardo
B. Marshall
C. Heckscher & Ohlin
D. Haberler
Which among the following statement is INCORRECT?
A. On a linear demand curve, all the five forms of elasticity can be depicted
B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
A. Increase
B. Decrease
C. Remain the same
D. Become zero
Correct answer is (C), Sloping down towards the right. The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases. AFC is equal to the vertical difference between ATC and AVC.