Average fixed cost, Microeconomics

Assignment Help:

Average Fixed Cost (AFC): AFC is the fixed cost per unit of output.

AFC = TFC/y

Since the TFC is constant throughout the short run, as y increases AFC will decline. Therefore, the AFC curve is downward sloping.

Average Variable Cost (AVC) : AVC is the variable cost per unit of output.

AVC = TVC/y.

AVC will generally decrease as the output increases. But because of the operation of the law of diminishing marginal product, the AVC will rise after a certain point. Notice that is it a mirror image of the average product curve. Manipulating the formulae of both will prove that AVC is inversely related to AP.


Related Discussions:- Average fixed cost

Summary of educational financing, Normal 0 false false fals...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Illustrates the key terms of excise tax, Illustrates the key terms of excis...

Illustrates the key terms of excise tax? Terms of excise tax: a. Tax incidence • Who bears the load of the tax? b. Excess burden or Deadweight loss • Taxes inflict

Techniques of manpower forecasting, Normal 0 false false fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Rational producer, In the context of managerial economics how do you explai...

In the context of managerial economics how do you explain a rational producer. Illustrate giving example covering different dimention.

Describe the benefits of globalization, Question: There is widespread b...

Question: There is widespread belief that the process of globalization has largely bypassed Sub-Saharan Africa, leaving the sub-continent in a state of marginalization in the w

Demand, what are tne methots of demand forecasting ?

what are tne methots of demand forecasting ?

Cost-of-living indexes, COST-OF-LIVING INDEXES   * The CPI is computed e...

COST-OF-LIVING INDEXES   * The CPI is computed each year as the ratio of cost of a typical group of consumer goods and services today in comparison to the cost during a base per

What is the difference between capital and capital value, What is the diffe...

What is the difference between 'Capital' and 'Capital value'?   "The total amount of money or other resources owned or used to obtain future income or benefits." On the other h

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd