In cost theory, the usual shape of the ________ curve is a rectangular hyperbola.  

The correct answer is Average fixed cost.

 Key Points

• AFC is the fixed cost per unit of output, calculated by dividing total fixed costs by the quantity of output produced.
• ​Behavior: AFC decreases as output increases since fixed costs remain constant, but they are spread over more units of output.
• Graph Shape: The AFC curve is downward sloping and never touches the axes, indicating that as output rises, AFC approaches but never reaches zero.

 Additional Information

•  Rectangular Hyperbola
  • Geometerically, it is a curve where (x,y) co-ordinates of the production at any point on the curve becomes constant.
  • The graph indicates inverse relationship.
• Some other important Cost curves:
  • Total Cost Curve: It is the sum of Total fixed costs and Total Variable Costs. 
  • Average Cost Curve (Average Total Cost): it is the ratio of Total cost to the quantity of output produced.
  • Marginal cost: It is additional cost of producing one more unit of output.