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What is the shape of the average fixed cost (AFC) curve...

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Economics
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What is the shape of the average fixed cost (AFC) curve?

Answer & Solution
Correct Answer: Option D
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.
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Sandhya Dwivedi
Sandhya Dwivedi 8 years ago
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.
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