Question

What is the shape of AFC in graph?

Answer 1

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● ◆ 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 verticaldifference between ATC and AVC. Variable returns to scale explains why the other cost curves are U-shaped.

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Answer 2

Average Fixed Cost -

The shape of afc is always negative like demand curve.

it's elasticity with respect to output is equal to 1.

as production of unit increases afc will be decrease that's why it's shape known as rectangular hyperbola.