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

Origin of sylos labini''''s limit pricing model, write about the origin of ...

write about the origin of sylos labini''s limit pricing model

Demand and Supply, #questDuring the 1990s, technological advance reduced th...

#questDuring the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in ter

Economic models, the general characterictics of economic models,its limitat...

the general characterictics of economic models,its limitations and verification

How are consequences of economists used, How are consequences of economists...

How are consequences of economists used? Economists generally use efficiency, information, equilibrium and incentive compatibility like focal points, and examine the consequenc

Managerial Economics, plot the demand schedule and draw the demand curve fo...

plot the demand schedule and draw the demand curve for the data given for marijuana in the case above

Supply and demand, #questioIn many metropolitan areas of the country, local...

#questioIn many metropolitan areas of the country, local governments often impose rent controls on apartments. The justification for doing so is that the current market rent is con

1, Find the market-clearing price and quantity of burritos.

Find the market-clearing price and quantity of burritos.

Black economy public policy interface, Black Economy Public Policy Interfac...

Black Economy Public Policy Interface: The above mode of functioning and expansion of the black economy became an important basis for policy disruption in India. The undergrou

Supply, concept of supply and the factors that affect the supply

concept of supply and the factors that affect the supply

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