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A. Total fixed cost and output:
TFC refers to total money expenses incurred on fixed inputs like plant, machinery, tools & equipments in the short run. Total fixed cost corresponds to the fixed inputs in the short run production function. TFC remains the same at all levels of output in the short run. It is the same when output is nil. It indicates that whatever may be the quantity of output, whether 1 to 6 units, TFC remains constant. The TFC curve is horizontal and parallel to OX-axis, showing that it is constant regardless of output per unit of time. TFC starts from a point on Y-axis indicating that the total fixed cost will be incurred even if the output is zero. In our example, Rs 360=00 is TFC. It is obtained by summing up the product or quantities of the fixed factors multiplied by their respective unit price.
What else can I help you with?
What is the relationship between total fixed cost and output?
What is the relation ship between total fixed cost and output?
How do you calculate the average fixed cost for a business?
To calculate the average fixed cost for a business, you divide the total fixed costs by the quantity of output produced. This gives you the fixed cost per unit of output.
What is the method to calculate average fixed cost in economics?
To calculate average fixed cost in economics, you divide total fixed costs by the quantity of output produced. This gives you the average fixed cost per unit of output.
Total variable cost does not increase in proportion to output is it true?
False, it is the fixed cost which is not increased or decreased with proportion to output.
Which of the following costs are included in the cost classification that is based on the relationship between total cost and volume of activity?
Varable cost and fixed cost
What is the relationship between total fixed cost and output?
What is the relation ship between total fixed cost and output?
Why AFC is a rectangular hyperbola?
AFC, or Average Fixed Cost, is represented as a rectangular hyperbola because it is inversely related to the level of output in the short run. As production increases, the total fixed costs are spread over more units, causing AFC to decrease. This relationship follows the equation AFC = TFC/Q, where TFC is constant and Q (quantity produced) increases, resulting in the characteristic hyperbolic shape. Thus, AFC approaches zero as output becomes very large, illustrating the inverse relationship between fixed costs and output.
How do you calculate the average fixed cost for a business?
To calculate the average fixed cost for a business, you divide the total fixed costs by the quantity of output produced. This gives you the fixed cost per unit of output.
What is the method to calculate average fixed cost in economics?
To calculate average fixed cost in economics, you divide total fixed costs by the quantity of output produced. This gives you the average fixed cost per unit of output.
What is the relationship between efficiency useful energy output and total energy output?
Efficiency is the ratio of useful energy output to total energy input. A higher efficiency indicates that a greater proportion of the total energy input is being converted into useful energy output. Therefore, as efficiency increases, the amount of useful energy output relative to total energy output also increases.
Total variable cost does not increase in proportion to output is it true?
False, it is the fixed cost which is not increased or decreased with proportion to output.
What is the relationship between watts and energy output?
Watts measure the rate at which energy is generated or consumed per second. Energy output is the total amount of energy produced or consumed over a period of time. The relationship is that the total energy output is equal to the power (in watts) multiplied by the time duration.
Which of the following costs are included in the cost classification that is based on the relationship between total cost and volume of activity?
Varable cost and fixed cost
How to find the average fixed cost in a business?
To find the average fixed cost in a business, you divide the total fixed costs by the quantity of output produced. This calculation helps determine the average cost of producing each unit of output in the business.
Relationship between marginal cost and average total cost?
The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.
What is the difference between output and productivity?
Output is total output. Productivity is out per man-year.
How would an increase in fixed cost affect average total cost?
An increase in fixed costs raises the total costs of production but does not affect variable costs. Since average total cost (ATC) is calculated by dividing total costs by the quantity of output, an increase in fixed costs will lead to a higher ATC, especially if output remains constant. This effect is more pronounced when production levels are low, as fixed costs are spread over fewer units. Conversely, as output increases, the impact on ATC diminishes since the fixed costs are distributed over a larger number of units.
