The shape of the average fixed cost curve is ______________.

U-shaped

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L-shaped

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rectangular hyperbola

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parallel to X axis

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Solution

The correct option is B rectangular hyperbola
Average Fixed Cost Curve is a rectangular hyperbola. This is because of the reason it is negatively sloped for relatively small quanitites.

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Similar questions

a) Why is Total Variable Cost curve inverse S- shaped?
b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a rectangular Hyperbola? Explain with help of a diagram.

Suppose that a firm's total fixed cost is Rs. 100, and the marginal cost schedule of a firm is the following :

$\begin{matrix} Output (in units) & 1 & 2 & 3 & 4 & 5 & 6 & 7 Marginal cost (in Rs) & 10 & 20 & 30 & 40 & 50 & 60 & 70 \end{matrix}$

(i) Is the MC curve U-shaped ?

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Why is Average Cost Curve U-shaped?

Q. Explain the shapes of the total fixed cost curve and the average fixed cost curve. Give one reason for each, to justify the shape of the two curves.

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The shape of the average fixed cost curve is ______________.

The correct option is B rectangular hyperbolaAverage Fixed Cost Curve is a rectangular hyperbola. This is because of the reason it is negatively sloped for relatively small quanitites.

The correct option is B rectangular hyperbola
Average Fixed Cost Curve is a rectangular hyperbola. This is because of the reason it is negatively sloped for relatively small quanitites.