Option 1: Rectangular Hyperbola Curve -> The Average Fixed Cost (AFC) curve is a rectangular hyperbola because AFC = Total Fixed Cost / Quantity. Since Total Fixed Cost remains constant, as output increases, AFC continuously decreases following the equation y = k/x (where k is constant). This creates a rectangular hyperbola that slopes downward from left to right, approaching both axes asymptotically but never touching them. The curve shows that fixed costs are spread over more units as production increases, making per-unit fixed cost progressively smaller -> correct