The correct answer is: A. Average fixed cost curve
An average fixed cost curve is a graph that shows the average amount of money a company spends on fixed costs per unit of output. Fixed costs are costs that do not change with the level of output, such as rent or insurance. As output increases, the average fixed cost decreases because the fixed cost is spread out over more units.
A rectangular hyperbola is a curve that has the equation $y = \frac{k}{x}$, where $k$ is a constant. The graph of an average fixed cost curve is a rectangular hyperbola because the average fixed cost is constant at a given level of output, but the average fixed cost decreases as output increases.
The other options are incorrect because they are not represented by a rectangular hyperbola.
- Average variable cost curve: The average variable cost curve is a graph that shows the average amount of money a company spends on variable costs per unit of output. Variable costs are costs that change with the level of output, such as the cost of raw materials. The average variable cost curve is U-shaped because variable costs are low at low levels of output, but they increase as output increases because the company has to pay more for raw materials.
- Production potential curve: The production potential curve is a graph that shows the maximum amount of output that a company can produce with a given amount of inputs. The production potential curve is a straight line because the company can produce more output by using more inputs.
- Extension path: The extension path is a graph that shows the least-cost way to produce a given level of output. The extension path is a curve that connects the points of tangency between the isoquants and the isocost lines.