Average fixed cost A. increases as output rises. B. remains constant as output rises. C. equals marginal cost for the first unit

Question

3 years ago

14

of output. D. decreases as output rises.

1 answer:

nordsb [41] · Answer 1 · 2022-01-23T18:27:57+03:00

Answer:

D

Explanation:

Average fixed cost = total fixed cost / output

Fixed cost is cost that does not vary with output.

for example electricity tariff

for example, total fixed cost is $10,000. what is average fixed cost when output is 500 and 1000

$10,000 / 500 = $20

$10,000 / 1000 = $10

We can see that average fixed cost decreased as output increased