Why is Total Fixed Cost curve parallel to X-axis?
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Fixed cost is parallel to X-axis because it remains constant at all levels of output.
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The total fixed cost curve is parallel to the x-axis because the fixed cost is remains fixed during all output levels.
What is the total fixed cost curve?
- Total fixed cost is the cost that is not changing with the level of output
- Total fixed costs include machinery, land, and buildings which are fixed and it does not change in the short-run
- Examples of fixed cost- Salary of employee, insurance premium, etc.
- The total fixed cost remains constant if there is zero output
- When the output increases then the variable cost also increases with some rate
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