Rectangular hyperbola is the shape of________.

Total Fixed Cost

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Average Fixed Cost

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Fixed Cost

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Marginal Cost

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Solution

The correct option is B Average Fixed Cost
The AFC curve is of the shape of rectangular hyperbola. Fixed cost is the cost that does not vary with output. AFC is total fixed cost divided by quantity so as quantity goes on increasing the cost per unit goes on decreasing sloping towards the right from left which is like a rectangular hyperbola.

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