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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost3 Marks
Question
What is the behaviour of Average Fixed Cost as output is increased? Why is it so?
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Answer

AFC falls, when output is increased. Since, the Total Fixed Cost remains the same with changes in output, therefore, AFC falls steadily with increase in output. AFC curve is downward sloping.

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