-At output level ₀Q,average fixed cost: A)is equal to EF B)is equal to QE C)is equal to QF D)is equal to QD E)must be increasing

Question

Quizplus · Accepted Answer

Average fixed cost (AFC) is calculated as total fixed cost divided by the quantity of output. At any given level of output, AFC is represented by the distance from the quantity axis (Q) to the point on the ATC curve directly above it, minus the average variable cost (AVC), which is the distance from the quantity axis to the AVC curve at that level of output. Since the AVC curve is not mentioned, and without a specific graph, the general principle is that AFC decreases as output increases because fixed costs are spread over more units. Therefore, without a graph, the most accurate answer based on standard economic principles is that AFC is represented by the distance from the quantity axis to the point on the total cost curve that corresponds to fixed costs, which would be the distance to the AFC curve itself, not directly represented in the options given. However, assuming a misunderstanding in the question's presentation, the closest interpretation would be that it's asking for a conceptual representation, in which case, without specific points EF, QE, QF, or QD being defined in standard economic graphs, the principle that AFC decreases as output increases is key. Thus, without a graph, the correct answer is inferred based on typical economic representations where QF might represent a conceptual distance from quantity to fixed cost on an abstract level.

-At Output Level 0Q,average Fixed Cost

-At Output Level ₀Q,average Fixed Cost