Which of the following is represented graphically by a horizontal line as production increases?

Average variable cost

TFC = TC – TVC

Total variable cost

Average fixed cost

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
12 days ago

The option represented graphically by a horizontal line as production increases is **Total Fixed Cost (TFC)**.

Since total fixed cost does not change with the level of production, it remains constant regardless of the amount produced, which is why it is represented as a horizontal line on a graph.

To clarify the others:

- **Average variable cost (AVC)** typically decreases and then may increase as production increases, resulting in a downward-sloping and then upward-sloping curve.
- **Total variable cost (TVC)** increases as production increases, represented by a curve that slopes upwards.
- **Average fixed cost (AFC)** decreases as production increases since fixed costs are spread over more units, leading to a downward-sloping curve.

So, the correct answer is **TFC = TC – TVC** or just Total Fixed Cost (TFC).