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

Economies of scope in the trucking industry, Economies of Scope in the Truc...

Economies of Scope in the Trucking Industry * Questions: - Economies of Scope - Are large-scale, direct hauls cheaper and more profitable than individual hauls by small t

Explain about oligopolistic market, How might a firm in an oligopolistic ma...

How might a firm in an oligopolistic market attempt to increase market share? Explanation of oligopoly; concentration ratio, producer sovereignty Explanation that oligopolie

Demand and Supply changes, The price of oil increases because OPEC reduces ...

The price of oil increases because OPEC reduces oil production

What is meant by dumping, What is meant by dumping? Dumping is when a p...

What is meant by dumping? Dumping is when a producing country dumps goods on foreign markets at a price lower than either the price on the home market or below the cost (HL: ma

Price mechanism, discuss the term of price mechanism,give examples to elabo...

discuss the term of price mechanism,give examples to elaborate the concept clearly

Determinants of investments, Determinants of investments: Expected Ra...

Determinants of investments: Expected Rate of Return: Investment spending is guided by the profit motive; thebusiness sector buys capital goods only when it expects such

Continuity and regularity- export strategy , Continuity and Regularity: ...

Continuity and Regularity: We should make it a point that once we have entered the market for a particular commodity and have gained some foothold in it, we must strive to ma

Assignment, suppose you have a coffee shop. list of fixed input and variabl...

suppose you have a coffee shop. list of fixed input and variable input for operating the shop

Determinants of social demand - economies of scale , Determinants of Social...

Determinants of Social Demand - Economies of Scale The universe of knowledge is highly diverse. There are certain branches of knowledge whose value to human culture and civil

Visit to village panchayat fo data agriculture based project, about visit t...

about visit to village panchayat fo data agriculture based project

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