Q1. Explain why does AFC curve consist of the shape of a rectangular hyperbola?
Q2. Describe as to why the AVC curve is U shaped.
Q3. Describe why AC and AFC come closer and closer to one other as output increases however they never meet?
Q4. Define the term marginal cost. Illustrate that it is the mirror image of the MPL curve.
Q5. Illustrate that if MC > AC, then the AC would increase.
Q6. Illustrate that the MC equivalents AC if AC is minimum.
Q7. Describe the idea of long run total cost (or LRTC) in detail.
Q8. Illustrate why is the LAC termed as a planning curve?
Q9. Differentiate between private and social costs by stating an illustration.
Q10. Validate the shape of LRTC. And explain why does the LRTC begin from the origin?