Refer to the above diagram.This firm's average fixed costs are:

Question

Quizplus · Accepted Answer

Average fixed cost (AFC) is the fixed cost per unit of output, which is not shown on the graph. However, the vertical distance between AVC and ATC represents the average variable cost (AVC) per unit of output, and adding the unknown fixed cost per unit (AFC) to the AVC would result in the average total cost (ATC) per unit, which is shown on the graph. Therefore, the vertical distance between AVC and ATC represents AFC, and is the answer.

Refer to the Above Diagram