Question
ATC must fall simply because AFC always falls. Comment.

Answer

No. ATC = AFC + AVC. Being a component of ATC, falling AFC implies falling ATC. But this is true only in the initial stages of production when average fixed cost is a significant component of AC. In the later stages of production, average fixed cost (because it is continuously falling) reduces to an insignificant component of AC. Accordingly, AC tends to rise along with the rising AVC, even when AFC tends to fall.

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