What Is the Shape of the Average Fixed Cost Curve

question 25

Multiple Choice

What is the shape of the average fixed cost curve for a firm in the short run?

• A) U-shaped.
• B) A curve that constantly increases as output expands and eventually approaches infinity at high rates of output.
• C) A vertical line.
• D) A curve that declines as output expands and approaches the horizontal-axis when output is large.

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Definitions:

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.

Journalizing

The process of recording a transaction entry into the journal.

Business Transactions

Financial activities or exchanges involving the transfer of value between entities or parties, affecting the financial position of a business.

Journal

A listing of business transactions in chronological order. The journal links on one page the debit and credit parts of transactions. Alternatively known as general journal.