A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped.

Name: A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped.
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Question

Quizplus · Accepted Answer

The average fixed cost curve represents fixed costs divided by the quantity produced. Fixed costs do not change with changes in quantity produced, so the curve is always a horizontal line that slopes downward as production increases. Therefore, it cannot be U-shaped.

A Firm's Average Fixed Cost Curve Can Never Be U-Shaped