In the perfectly competitive model, a firm's average total cost curve is assumed to be downward...
In the perfectly competitive model, a firm's average total cost curve is assumed to be downward sloping for all levels of output they may produce.
Group of answer choices
True
False
Homework Answers
Ans: False
Explanation:
In the perfectly competitive model, a firm's average fixed cost curve is assumed to be downward sloping for all levels of output they may produce because total fixed costs remain unchanged.
Average fixed cost ( AFC ) = Total cost ( TC ) / Quantity of output (Q)
In the perfectly competitive model, a firm's average total cost curve is ' U' shaped. Initially ATC curve decreases and then increases with the subsequent level of production.
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