Explore BrainMass
Share

average fixed cost (AFC) curve, average variable cost (AVC) curve, the average total cost (ATC) curve, and the marginal cost (MC)

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have the firm's AFC (average fixed cost), AVC (average variable cost), ATC (average total cost) and MC (marginal cost) and therefore these cost curves? Why?

© BrainMass Inc. brainmass.com October 25, 2018, 3:54 am ad1c9bdddf
https://brainmass.com/economics/microeconomics/358524

Solution Preview

When fixed prices go up the following will happen:

AFC = TFC/Q will go up because TFC rises.
AVC = TVC/Q will NOT change because TVC does not change.
ATC = TC/Q = (TVC + TFC)/Q will ...

Solution Summary

This solution exemplifies average fixed cost (AFC) curve, average variable cost (AVC) curve, the average total cost (ATC) curve, and the marginal cost (MC).

$2.19
See Also This Related BrainMass Solution

Costs of Production

Need help problem must on excel file

View Full Posting Details