Final answer:
The average fixed cost curve is a downward sloping curve on a graph where as the quantity of output increases, the average fixed cost decreases. Spreading the overhead means that as production increases, the fixed costs are divided over a larger quantity of output, resulting in a lower average fixed cost.
Step-by-step explanation:
The average fixed cost curve is a downward sloping curve on a graph where as the quantity of output increases, the average fixed cost decreases. This is because fixed costs are spread over a larger quantity of output. Spreading the overhead means that as production increases, the fixed costs are divided over a larger quantity of output, resulting in a lower average fixed cost.