What is AFC(Average fixed cost):
Average Fixed Cost (AFC) is the fixed cost per unit of output.
What is TFC(Total fixed cost):
Total Fixed Cost (TFC) is the total cost that does not change with the level of output. It remains constant regardless of how much or how little is produced.
The key points of AFC:
AFC decreases as output increases.
It is always greater when production is low and lower when production is high.
The key points of TFC:
Fixed expenses like rent, salaries, and insurance.
Does not vary with production levels.
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