CUET Preparation Today
In the short run, the shape of the average fixed cost curve for a typical firm is? |
Vertical to y-axis. Downward sloping left to right. Rectangular hyperbola. Horizontal to x-axis. |
Rectangular hyperbola. |
The correct answer is Option (3) → Rectangular hyperbola. In the short run, Average Fixed Cost (AFC) is calculated as: AFC=Total Fixed Cost / Output As output increases, AFC continuously decreases, but never becomes zero. Its curve is downward sloping and forms the shape of a rectangular hyperbola, meaning the product of output and AFC remains constant (equal to total fixed cost).
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