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Question
Explain the shape of the total fixed cost (TFC) curve.
Explain
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Solution
The TFC curve is a horizontal straight line parallel to the X-axis at the level of total fixed cost (OA), showing that fixed cost remains constant at all levels of output.
It begins from point A on the Y-axis, indicating that fixed cost is incurred even when output is zero.
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Chapter 22: Model Short Answer Questions - MODEL SHORT ANSWER QUESTIONS [Page 466]
