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29 July, 10:07

If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the afc per paper?

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  1. 29 July, 10:09
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    The average fixed cost of paper is the same. Average fixed cost or afc is the fixed costs of production per unit of goods. Falling sales of paper by 20% is not related to production cost but to profit. Thus, decrease in sales will not affect the average fixed cost of the paper.
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