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Potential GDP Is the Value of GDP That Can Be

question 35

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Potential GDP is the value of GDP that can be calculated if we assume that


Definitions:

AFC Curve

A graph representing Average Fixed Costs, which shows how fixed costs per unit of output decrease as production increases.

Total Cost Function

An equation that expresses the total cost of producing a given quantity of output, considering both fixed and variable costs.

Average Total Cost

The total cost of production divided by the number of units produced, signifying the cost per unit of output.

Average Fixed Cost

The total fixed costs of production divided by the number of units produced, showing the fixed cost per unit.

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