Question

Why is the shape of Average Fixed Cost curve a hyperbola ?

Answer 1

Answer:

yes the shape of a AFC is rectangular hyperbola coz Average fixed cost curve looks like a rectangular hyperbola. It is ratio of Total Fixed Cost (TFC) to output. ... AFC can never be zero because it is a rectangular hyperbola and it never intersects the x-axis and thereby can never be equal to zero.

Answer 2

Answer:

The more production increases, the more average fixed cost declines. ...

Explanation:

For the geometrically inclined, this average fixed cost curve is a rectangular hyperbola. This declining average fixed cost curve is a major reason that the average total curve is negatively sloped for relatively small output quantities.

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