What happens to the average fixed cost, when the output of a firm increases.

Q: If a firm's average variable cost curve is rising, its marginal cost curve must be

A: To find: What should be Marginal curve.

Q: Why will firms in most markets be located at or close to the bottom of the long-run average cost…

A: In the long run, all the costs are the variable costs. In long run, costs are lower than that of in…

Q: Why should a firm shut down if its average variable cost curve is above the price of their product?

A: If the price of the product is below the average variable cost (AVC), then the firm will shutdown.…

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: If a firm produce zero, its cost must be zero in the short run? C True C False

A: The total cost of production can be divided into two components namely fixed cost and variable cost…

Q: Calculate the Marginal Cost at Q 200? Calculate the Marginal Cost at Q 300? Calculate the Average…

A: the marginal cost is the change in the total cost that arises when the quantity produced is…

Q: Are all fixed costs also sunk costs?

A: Sunk Cost: It refers to the cost that is once incurred can’t be recovered.Fixed Cost: It is the cost…

Q: Why does as output increases, average variable cost initially declines and eventually begins to…

A: In an economy, the cost is analyzed in different ways, such as total cost, marginal cost, average…

Q: In the short run, each firm experiences a loss of $

A: We know , Profit = TR - TC  TR = Price * Quantity TR = 100 *50 TR = 5000 ATC = TCQ TC = ATC * Q  TC…

Q: In the short run, when the output of a firm increases, its average fixed cost

A: To find : What will be average fixed cost.

Q: A firm’s marginal product will be at a maximum at which of the following levels of output?…

A: To determine the level of output at which a firm's marginal product will be at a maximum.

Q: What are Fixed Costs?

A: A company mainly faces two type of costs known as fixed cost and variable cost. These two costs are…

Q: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: Use the graph below to answer the following question. 10 8 Long Run Average Total Costs

A: The long run average total cost curve (LRATC) shows the per unit total cost incurred by the firm in…

Q: Define Fixed Cost and provide an example.

A: A company's fixed expenses are critical. Profit forecasting and calculating the break-even point are…

Q: Each graph illustrates three short-run cost curves for firms, where ATC is average total cost (also…

A: The marginal cost curve refers to the curve that shows additional cost of production when the firm…

Q: What are examples of fixed and variable costs in a fast food restaurant?

A: Total fixed cost (TFC)is defined as those cost which a firm must pay irrespective of its level of…

Q: Distinguish between the fixed costs and the variable costs?

A: Cost represents the value of goods and services which are charged by the producers and the amount…

Q: In the short run, if a marginal cost of a firm in a competitive industry is increasing while its…

A:

Q: What happens to fixed cost as the quantity produced increases?

A: In the market, when a firm makes production activities, there are various costs incurred during this…

Q: Briefly explain the short run fixed costs and the variable cost in modern economics?

A: Short-run is the time period that is less than or equal to a year. The costs can be divided into two…

Q: Fixed costs can be defined as costs that

A: A fixed cost(FC) is the cost that does not change with the decrease or increase in the number of…

Q: A firm has a cost function given by C(y)=100+12y-8y^2+2y^3. At what output level is marginal cost…

A: "In economics, cost refers to the value of money that is spent in order to produce a good." "A cost…

Q: In the given figure, short-run cost curves are depicted. What role does the graph's Curve Y…

A: "Cost curves in economics represents a graph of the costs involved in the production process as a…

Q: Rick's ski board factory has the Total Cost function: TC(Q)=0.02Q³ +300Q +200 where Q is the number…

A: The total cost function is the sum of the variable and the fixed cost. The variable cost is the cost…

Q: Explain Fixed costs versus variable costs and give an example?

A: Fixed Cost: It is the cost that is incurred for purchasing fixed factors of production. It is…

Q: discuss more about fixed and variable costs.

A: TC(Total) is the cost which is incurred by a firm in producing some specific level of output. It is…

Q: What are the fixed and variable costs of (a) a pizza shop, (b) an Internet service provider, (c) a…

A: There are various costs associated with the process of production and the main two categories of…

Q: Why is the short run marginal cost curve U- Shaped?

A:

Q: Show the effect of diminishing returns on the marginal and average cost curves of a firm in the…

A: diminishing returns is a  financial regulation expressing assuming one contribution to the…

Q: A firm’s marginal cost is the increase in its total cost divided by the increase in its ( A Average…

A: Total cost is the overall cost incurred in the course of production.

Q: Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is MC=4 + 2q. a)…

A:

Q: Using the figure above, what is the total cost for the firm?

A: Total cost is the summation of total fixed cost and total variable cost. The average total cost to…

Q: Briefly write the behaviour of Average fixed cost when output increase

A: # By the name itself we can see that average fixed cost is on an average value of fixed cost…

Q: Would you consider an interest payment on a loan to a firm an explicit or implicit cost?

A: A producer faces two types of the cost when computing accounting profit and economic profit. These…

Q: An increase in the firm's cost of a fixed input will in the long-run, cause the

A: An increase in the firm's cost of a fixed input will increase the fixed cost of firm. An increase in…

Q: Why is the Average Variable cost U-shaped

A: Costs are the expenses that firms incur in the production of goods and services. A firm typically…

Q: Explain average fixed cost (AFC)?

A: Costs are the sums of money spent by producers on various variables of production in order to…

Q: explain why the lower marginal cost firm can never produce the same as the high marginal cost firm

A: marginal cost is the cost of producing additional unit of product . and it helps to the firm to…

Q: The average variable cost curve and the average total cost curve get closer to each other as output…

A: The average variable cost refers to the variable cost per unit. The average total cost is the…

Q: Why is it reasonable to think of normal profit as a type of cost to the firm?

A: In the short run, firms usually try to temporarily shut down their operations when the prices are…