What does the average fixed cost curve look like? Why does it look so?
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What does the average fixed cost curve look like? Why does it look so?
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Average fixed cost curve looks like a rectangular hyperbola. It is defined as the ratio of TFC to output. We know that TFC remains constant throughout all the output levels and as output increases, with TFC being constant, AFC decreases.

 The average fixed cost curve is depreciatingly sloped. Average fixed cost is relatively high at small quantities of output, then declines as production increases

When output level is close to zero, AFC is infinitely large and by contrast when output level is very large, AFC tends to zero but never becomes zero. AFC can never be zero because it is a rectangular hyperbola and it never intersects the x-axis and thereby can never be equal to zero.
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