Question```latex
At every point along the AFC curve in the figure to the right, what is true of the dollar amount of this firm's total fixed costs at any given point that one might select?
Total fixed cost is by definition. If the output rate is 250 units in the figure, then AFC equals \\square\square\square$ per unit. (Enter your responses rounded to two decimal places.)
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Studdy Solution
STEP 1
1. The Average Fixed Cost (AFC) curve represents the fixed costs per unit.
2. Total Fixed Cost (TFC) is constant regardless of the quantity produced.
3. AFC is calculated as TFC divided by the quantity of output.
4. The problem requires calculating AFC and TFC at specific output levels.
STEP 2
1. Define Total Fixed Cost (TFC).
2. Calculate AFC and TFC at an output of 250 units.
3. Calculate AFC at an output of 314 units.
STEP 3
Define Total Fixed Cost (TFC):
Total Fixed Cost is constant by definition, meaning it does not change with the level of output.
STEP 4
Calculate AFC at an output of 250 units:
Given the AFC curve, identify the AFC value at 250 units. Assume the AFC value is provided or can be read from the graph.
Calculate TFC using the formula:
STEP 5
Calculate AFC at an output of 314 units:
Since TFC is constant, use the TFC calculated in Step 2 to find AFC at 314 units:
Round the result to two decimal places.
The calculated values will depend on the specific AFC value at 250 units, which should be obtained from the graph.
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