The correct answer is C. Sloping down towards the right.
Average fixed cost (AFC) is the total fixed cost divided by the number of units produced. Fixed costs are costs that do not change with the level of production, such as rent, insurance, and depreciation. As the number of units produced increases, AFC decreases. This is because the fixed costs are spread out over a larger number of units.
Option A is incorrect because the average fixed cost curve is not U-shaped. The average fixed cost curve is always downward-sloping.
Option B is incorrect because the average fixed cost curve is not horizontal up to a point and then rising. The average fixed cost curve is always downward-sloping.
Option D is incorrect because the average fixed cost curve is not a rectangular hyperbola. The average fixed cost curve is always downward-sloping.