Asked by Lesley Figueroa on Apr 29, 2024
Verified
How can the average-fixed-cost curve be declining when fixed cost is constant?
Average-Fixed-Cost Curve
A graph that shows the average fixed costs of production at different levels of output.
Fixed Cost
Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance, remaining constant regardless of production volume.
- Determine the relationship between fixed costs, variable costs, average costs, and their behaviors over the output level.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
Although fixed cost is unchanged as output increases, AFC = FC/Q. Thus, AFC is always declining as output increases.
Learning Objectives
- Determine the relationship between fixed costs, variable costs, average costs, and their behaviors over the output level.
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