Question

This question represents a change in a typical business. Circle which of the costs will be affected first by this change. Then draw the cost curves to show the effect graphically on the overall costs of the producer.

“Small Business Expensing: Instead of depreciation deduction spread over a number of years, a business with a small investment in equipment can now deduct them for tax purposes. The limit that can be deducted has also been raised.

“Circle one AFC AVC ATCMC draw a graph of all and show change.

Thank you.

Answer 1

AFC - As yield increment AFC continues diminishing mode since we as a whole know AFC bend is a descending slanting bend. It is to be noticed that AFC never gets zero so it won't contact any hub.

AVC - It appears in beginning stage law of diminishing expense is applying lastly activity of law of expanding cost or decreasing return is apprently rising.

ATC/AC - The purpose of least normal expense in the purpose of ideal usage of firm limit.

MC - it is the expense of extra unit delivered in a firm