The figure given below shows the revenue and cost curves of a perfectly competitive firm. Figure 23.1 In Figure 23.1, 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 23.1  In Figure 23.1, average fixed cost at the profit-maximizing output is equal to ______.

Quizplus · Accepted Answer

The profit-maximizing output is where MR=MC, which is at point H in the diagram. At this output level, the average fixed cost (AFC) is given by the vertical distance between the AFC curve and the horizontal axis, which is GH. Therefore, the answer is (C) GH.

The Figure Given Below Shows the Revenue and Cost Curves