Explore BrainMass

Explore BrainMass

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

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED 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 3, 2022, 1:43 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).

    $2.49

    ADVERTISEMENT