Average fixed cost [AFC] is the:
A)horizontal distance between average total cost [ATC] and average variable cost [AVC].
B)vertical distance between ATC and AVC.
C)horizontal distance between ATC and the Y-axis.
D)vertical distance between ATC and the X-axis.

Question

Quizplus · Accepted Answer

AFC is the fixed cost per unit of output, which can be calculated by subtracting the variable cost from the total cost and then dividing the result by the quantity of output. In other words, AFC is the difference between ATC and AVC, which represents the fixed portion of the total cost. Therefore, the vertical distance between ATC and AVC is the correct definition of AFC.

Average Fixed Cost [AFC] Is The