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AFC = (TFC/ Q). It looks like a hyperbola because fixed cost is spread over a larger range of output
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The average fixed cost curve is constant?
Yes.
What causes average fixed cost to decline?
The average fixed cost curve is negatively sloped. Average fixed cost is relatively high at small quantities of output, then declines as production increases. The more production increases, the more average fixed cost declines. The reason behind this perpetual decline is that a given FIXED cost is spread over an increasingly larger quantity of output.
If Energy is a fixed cost and energy prices rise what happens to the companys average total cost curve?
The curve will be shifted upwards, but because it is an AVERAGE cost curve, the shift will be of a different value for different places on the curve. The shift will be very dramatic at small quantities of production, significant at larger quantities, and almost unnoticeable at very large quantities.
Indicate how each of the following would shift 1. the marginal cost curve 2. the average variable cost curve 3. the average fixed cost curve and 4. the average total cost curve of a manufacturing firm?
a. Property taxes are fixed costs, so this would decrease AFC, which in turn decreases ATC.b. Wages are typically variable costs, so this would increase both MC and AVC, which in turn increases ATC.c. Electricity is typically a variable cost, so this would decrease both MC and AVC, which in turn decreases ATC,d. Insurance is a fixed cost, so this would increase AFC, which in turn increases ATC.
Why is an Average Fixed Cost curve downward sloping?
This is a simple enough question to answer, Fixed cost is defined as the cost invariant of output, i.e. cost that doesnot change as output increases, i.e. constant. So if you divide a constant by output as a variable, as output increases Average Fixed Costs drop.
The average fixed cost curve is constant?
Yes.
What do you say about the eccentricity e of a hyperbola?
A hyperbola is a math term meaning a curve in which the distances form either a fixed point or a straight line with a fixed ratio. The formula to find the eccentricity of a hyperbola is "E=C/A," with A being the distance from the center to the focus, and C being the distance from the center to the vertex. Math fans say that solving this formula is about as easy as solving for the area of a triangle, meaning it is not a difficult concept to master.
What is foci of hyperbola?
A half of a hyperbola is defined as the locus of points such that the distance of the point from one fixed point (a focus) and its distance from a fixed line (the directrix) is a constant that is greater than 1 (the eccentricity). By symmetry, a hyperbola has two foci and two directrices.
What happen to the average fixed cost curve when there is a reduction in business property taxes?
It will shift down.
What causes average fixed cost to decline?
The average fixed cost curve is negatively sloped. Average fixed cost is relatively high at small quantities of output, then declines as production increases. The more production increases, the more average fixed cost declines. The reason behind this perpetual decline is that a given FIXED cost is spread over an increasingly larger quantity of output.
What a conic section?
A conic section is a curve formed by the intersection of a plane with a cone (conical surface). If the section is parallel to the base of the cone, the conic section has a fixed diameter and is a circle. Any other plane that does not intersect the apex is either a parabola, a hyperbola, or an ellipse.
What is a conic section?
A conic section is a curve formed by the intersection of a plane with a cone (conical surface). If the section is parallel to the base of the cone, the conic section has a fixed diameter and is a circle. Any other plane that does not intersect the apex is either a parabola, a hyperbola, or an ellipse.
What is the focus of a hyperbola?
The foci (plural of focus, pronounced foh-sigh) are the two points that define a hyperbola: the figure is defined as the set of all points that is a fixed difference of distances from the two points, or foci.
Which two fixed points define the shape of a hyperbola?
the foci (2 focal points) and the distance between the vertices.
If Energy is a fixed cost and energy prices rise what happens to the companys average total cost curve?
The curve will be shifted upwards, but because it is an AVERAGE cost curve, the shift will be of a different value for different places on the curve. The shift will be very dramatic at small quantities of production, significant at larger quantities, and almost unnoticeable at very large quantities.
Indicate how each of the following would shift 1. the marginal cost curve 2. the average variable cost curve 3. the average fixed cost curve and 4. the average total cost curve of a manufacturing firm?
a. Property taxes are fixed costs, so this would decrease AFC, which in turn decreases ATC.b. Wages are typically variable costs, so this would increase both MC and AVC, which in turn increases ATC.c. Electricity is typically a variable cost, so this would decrease both MC and AVC, which in turn decreases ATC,d. Insurance is a fixed cost, so this would increase AFC, which in turn increases ATC.
Why is an Average Fixed Cost curve downward sloping?
This is a simple enough question to answer, Fixed cost is defined as the cost invariant of output, i.e. cost that doesnot change as output increases, i.e. constant. So if you divide a constant by output as a variable, as output increases Average Fixed Costs drop.
