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Economics Model Answers Thirteen (view source)
Revision as of 17:40, May 20, 2007
, 17:40, May 20, 2007no edit summary
5. Look again at Figure B (right). Assume the firm is perfectly competitive. Explain what AFC is, and use the labels on the graph to describe its amount.
5. Look again at Figure B (right). Assume the firm is perfectly competitive. Explain what AFC is, and use the labels on the graph to describe its amount.
'''AFC is average fixed cost.'''
'''AFC is average fixed cost, which is the difference between ATC and AVC: AFC=ATC-AVC. Using the labels on the graph, AFC = C-B.'''
6. Now turn to Figure A (right). What is the opportunity cost of shifting production from B to C?
6. Now turn to Figure A (right). What is the opportunity cost of shifting production from B to C?