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FromTheMoon [43]
3 years ago
13

The average fixed cost curve a. always declines with increased levels of output. b. always rises with increased levels of output

. c. declines as long as it is above marginal cost. d. declines as long as it is below marginal cost.
Business
1 answer:
Zolol [24]3 years ago
7 0

Answer: a. always declines with increased levels of output.

Explanation: the average fixed cost curve graphically illustrates or shows the relation between average fixed cost a firm incurs in the short-run production of a good or service, and the quantity produced. The average fixed cost curve always declines with increases in the level of output resulting in a negatively sloped curve. This is to say that the average fixed cost is relatively high at smaller quantities of output, which then declines as the level of production increases--the more output increases, the more average fixed cost declines. Why this occurs is that a given fixed cost is spread over an increasingly larger quantity of output and as such, firms can profitably charge a lower price with increased output.

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