Introduction
APC (Average Product Cost) is a financial term used to measure the cost of producing a single unit of a product. It is calculated by dividing the total cost of production by the number of units produced. Generally, APC is expected to be positive, as it represents the average cost incurred in the production process. However, there are certain scenarios where APC can be negative, which can be explained as follows:

1. Overallocation of Fixed Costs
Fixed costs are expenses that do not vary with the level of production. These costs include rent, salaries, insurance, and depreciation. If the level of production is low and fixed costs are high, it is possible for the APC to be negative. This occurs when the fixed costs are allocated to a small number of units, resulting in a higher average cost per unit. In such cases, the APC may be negative if the total fixed costs are greater than the total variable costs.

2. Subsidies and Grants
In certain situations, companies may receive subsidies or grants from the government or other sources. These subsidies are meant to offset the production costs and encourage certain industries. If the subsidies received are greater than the total cost of production, the APC can be negative. This means that the company is essentially being paid to produce the units, resulting in a negative average cost.

3. Economies of Scale
Economies of scale occur when the cost per unit decreases as the level of production increases. In some cases, economies of scale can be significant, resulting in a negative APC. This happens when the increase in production leads to a proportionately smaller increase in costs. For example, if a company doubles its production but the cost increases by only 50%, the APC will be negative.

Conclusion
While APC is generally expected to be positive, there are certain circumstances where it can be negative. Overallocation of fixed costs, subsidies and grants, and economies of scale are the main factors that can lead to a negative APC. It is important to consider these factors while analyzing the financial performance of a company. However, it is worth noting that a negative APC is not a common occurrence and is usually a temporary situation influenced by specific factors.

No, APC can not be negative because even if there is 0 level of income, there has to be some consumption (autonomous consumption)on the other hand, APS can be negative as consumption at 0 level of income is nothing but dissaving. Y Priyanka?