Short run average cost curves:Average Fixed Cost (AFC):
The average fixed cost is a fixed cost per unit of output. This is acquired by dividing the total fixed cost by the number of units of the commodity generated.
AFC = TFC / Q
Here, AFC = Average fixed CostTFC = Total Fixed costQ = number of units of output generated
Assume that for a firm, total fixed cost is $ 2000 if output is 100 units, AFC will be $ 2000/100 = $ 20 and if output is 200 units, AFC will be $ 2000/200 = $10/- as total fixed cost is a steady quantity, average fixed cost will constantly fall as output raises; whenever output becomes very big, average fixed cost approaches to zero.
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