Question

Draw an average fixed cost curve. Label it. The AFC curve has this shape because​ _______.

Answer 1

Answer:

(A) when output​ increases, the firm spreads its total fixed cost over a larger output

Explanation:

The average fixed cost will decrease as the output increase because the company allocate ths cost over a larger amount making the weight on each unit decrease:

$\lim_{n \to \infty} \frac{x}{n} = 0$

Using math we can determinate that the fixed cost tend to zer oas higher increase the amount of quantity produced.