Question

what is the behaviour of average fixed cost as output increases ????​

Answer 1

average fixed cost continuously decrease as output increase but it never reduced to zero

Answer 2

Explanation:

The reason, of course, is that as output increases, a given fixed cost is spread more thinly over a larger quantity. Secondly, average fixed cost remains positive, it never reaches a zero value, because average fixed cost is a rectangular hyperbola. This happens because AFC is defined as the ratio of TFC to output.

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