[amp_mcq option1=”$$\frac{{{\text{TFC}}}}{{\text{Q}}}$$” option2=”$$\frac{{\text{Q}}}{{{\text{FC}}}}$$” option3=”$$\frac{{{\text{TFC}}}}{{{\text{FC}}}}$$” option4=”$$\frac{{{\text{FC}}}}{{{\text{TC}}}}$$” correct=”option1″]
The correct answer is: A. $\frac{{{\text{TFC}}}}{{\text{Q}}}$
Average fixed cost (AFC) is a measure of the fixed cost per unit of output. It is calculated by dividing the total fixed cost (TFC) by the quantity produced (Q).
The other options are incorrect because:
- Option B: $\frac{{\text{Q}}}{{{\text{FC}}}}$ is the definition of average variable cost (AVC).
- Option C: $\frac{{{\text{TFC}}}}{{{\text{FC}}}}$ is the definition of the fixed cost coefficient.
- Option D: $\frac{{{\text{FC}}}}{{{\text{TC}}}}$ is the definition of the capital intensity ratio.