AFC falls, when output is increased. Since, the Total Fixed Cost remains the same with changes in output, therefore, AFC falls steadily with increase in output. AFC curve is downward sloping.
AFC = TFC/Q
| Units (Q) |
TFC |
AFC (Rs.) |
| 0 |
100 |
00 |
| 1 |
100 |
100 |
| 2 |
100 |
50 |
| 3 |
100 |
33.3 |
| 4 |
100 |
25 |
| 5 |
100 |
20 |
| 6 |
100 |
16.67 |
| 7 |
100 |
14.2 |
| 8 |
100 |
12.5 |
| 9 |
100 |
11.1 |
| 10 |
100 |
10 |
