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Question
What does the average fixed cost curve look like? Why does it look so?
What does the average fixed cost curve look like? Why does it look so?
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Solution
The average fixed cost (AFC) curve is a rectangular hyperbola. The area under the curve is constant because TFC is constant at all levels of output.
The average fixed cost (AFC) curve is a rectangular hyperbola. The area under the curve is constant because TFC is constant at all levels of output.
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