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
Average fixed cost curve is actually a ................... curve:
CUET UG 2025 — Economics Micro
2025mcqmedium
Average fixed cost curve is actually a ................... curve:
Official previous-year question
Held on 27 May 2025 · Verified 13 Jul 2026.
Options
- A
Rectangular Hyperbola Curve.
- B
L shape Curve.
- C
'U' Shaped Curve.
- D
Downward Straight Line Curve.
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