(4) The Average Fixed CostCurvegraphically representsthe relation between averagefixed cost incurred by a firmin the short-run product of agood or service and the quantityproduced. it is relativelyhigh at small quantities ofoutput, then declines as productionincreases. It is downwardsloping because as outputincreases, the firm spreadsits fixed costs over larger andlarger amounts of output.