Averaged fixed costs for a firm:

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BlackTom AI · Accepted Answer

Question restatement: The prompt asks about Averaged fixed costs for a firm and presents four options to evaluate.
Option 1: 'are constant with increasing output q' Fixed costs are incurred regardless of output, so the total fixed cost stays the same, but the average fixed cost (AFC = FC / q) declines as q rises. Therefore, AFC is not constant; it decreases with output.
Option 2: 'are always lower than average variable costs' This claim compares AFC to average variable costs (AVC). In fact, AFC declines with output and can be greater or less than AVC depending on the level of output. There is no general rule that AFC must be always lower than AVC, so this statement is not universally true.
Option 3: 'are always decreasing with increasing output q' This matches the standard relationship AFC = FC / q. Since FC is fixed, increasing q spreads those fixed costs over more units, causing AFC to fall continuously as output expands. This statement correctly describes AFC behavior.
Option 4: 'are the reason ATC are eventually increasing in output q' Average total cost (ATC) equals AFC plus AVC. ATC can rise at higher output if AVC is rising and AFC is already small; however, saying AFC is 'the reason' ATC is eventually increasing over all cases is misleading. ATC's shape depends on both AFC and AVC, and AFC alone does not determine the eventual increase in ATC in all scenarios.
In summary, the reasoning shows that AFC declines as q increases due to the nature of fixed costs being spread over more units, while the other statements mischaracterize the relationships: constant AFC is incorrect, AFC need not be always below AVC, and attributing ATC's eventual rise solely to AFC oversimplifies the interaction between AFC and AVC.

ECON1001 (ND) Quiz #1 (Early Feedback Task)

Averaged fixed costs for a firm:

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Which one of the following is a true statement about average fixed costs? Average fixed costs

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ECON1001 (ND) Quiz #1 (Early Feedback Task)

Averaged fixed costs for a firm:

查看解析

登录即可查看完整答案

类似问题

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7. If you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed costs are $10, then total fixed costs are: A. $5 B. $100 C. $1,020 D. $1,040

Figure 14-2Refer to Figure 14-2. Curve A is always declining because

Which one of the following is a true statement about average fixed costs? Average fixed costs

Which one of the following is a true statement about average fixed costs? Average fixed costs

更多留学生实用工具

希望你的学习变得更简单

9. The average fixed cost when the quantity produced