Which of the following cost curves is never U-shaped?

Average cost curve
Marginal cost curve
Average variable cost curve
Average fixed cost curve

The correct answer is D. Average fixed cost curve.

Average fixed cost (AFC) is a measure of the average cost per unit of output produced when fixed costs are divided by the number of units produced. AFC is always decreasing as output increases, because the fixed costs are spread out over a larger number of units.

Average variable cost (AVC) is a measure of the average cost per unit of output produced when variable costs are divided by the number of units produced. AVC is U-shaped, because variable costs increase at first as output increases, but then decrease as output increases further.

Marginal cost (MC) is the change in total cost that results from producing one additional unit of output. MC is always increasing, because the marginal cost of producing an additional unit of output increases as output increases.

Therefore, the average fixed cost curve is the only cost curve that is never U-shaped.

Exit mobile version