The figure given below shows the revenue and cost curves of a perfectly competitive firm. Figure 9.1
- In Figure 9.1,average fixed cost at the profit-maximizing output is equal to ______.

Question

The figure given below shows the revenue and cost curves of a perfectly competitive firm. Figure 9.1 
- In Figure 9.1,average fixed cost at the profit-maximizing output is equal to ______.

Quizplus · Accepted Answer

Average fixed cost is equal to total fixed cost divided by output. At the profit-maximizing output, total fixed cost is spread over a larger number of units of output, so average fixed cost is lower. In Figure 9.1, average fixed cost is equal to GH.

The Figure Given Below Shows the Revenue and Cost Curves