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For example, most of the costs involved in the production
of the PowerPC or Pentium chips that are at the heart of most
current personal computers are design costs. Such costs are essentially
fixed costs; they are the same if 1 or 1 million chips are produced.
If millions of chips can be sold these costs can be averaged
or spread over all the units sold so that the average design cost
per chip can be quite low. For this reason, the AFC curve will always be falling as output grows.
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