AFC is computed by:

$$rac{{{ ext{TFC}}}}{{ ext{Q}}}$$
$$rac{{ ext{Q}}}{{{ ext{FC}}}}$$
$$rac{{{ ext{TFC}}}}{{{ ext{FC}}}}$$
$$rac{{{ ext{FC}}}}{{{ ext{TC}}}}$$

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

448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z"/> Subscribe on YouTube
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.
Exit mobile version