FIGURE 7-4

-Refer to Figure 7-4. At output level 0Q, what is average fixed cost equal to?
A) ED
B) FE
C) FC
D) EB.

Question

FIGURE 7-4
 
-Refer to Figure 7-4. At output level 0Q, what is average fixed cost equal to?
A) ED 
B) FE 
C) FC 
D) EB.

Quizplus · Accepted Answer

Average Fixed Cost (AFC) is calculated as total fixed cost divided by the quantity of output. At output level 0Q, since there is no output, the concept of AFC in terms of per unit cost doesn't directly apply in the usual sense, but the total fixed cost is represented by the distance ED on the graph, which remains constant regardless of the level of output.

FIGURE 7-4 -Refer to Figure 7-4. at Output Level 0Q, What Is