Questions
Single choice
An average fixed cost will
Options
A.remain unchanged when output rises
B.fall continuously when output rises
C.has a u-shaped curve, it falls then rise again
D.rise continuously when output rises
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Step-by-Step Analysis
Start by recalling what average fixed cost (AFC) means: fixed cost divided by the level of output. Since fixed cost stays constant while output increases, dividing by a larger number makes AFC drop.
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Similar Questions
Part 1Draw an average fixed cost curve. Label it. Click toenlargegraph Part 1Why does the AFC curve have this shape?The AFC curve has this shape because _______. A. when output increases, total fixed cost decreases B. when output increases, total fixed cost increases C. it reflects diminishing returns D. when output increases, the firm spreads its total fixed cost over a larger output Part 1 0246810048121620Output (gift baskets per day)Cost (dollars per basket) AFCAFC Edit coordinates interactive graph>>> Draw only the objects specified in the question.
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