The average fixed cost curve approaches the horizontal axis but never touches it

Name: The average fixed cost curve approaches the horizontal axis but never touches it
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is true because the average fixed cost is defined as total fixed costs divided by quantity produced. As quantity produced increases, the fixed costs are spread over more units, causing the average fixed cost to decrease. However, since total fixed costs cannot be zero, the curve will approach the horizontal axis but never touch it.

The Average Fixed Cost Curve Approaches the Horizontal Axis but Never