As output rises,average fixed cost
A)rises.
B)falls.
C)remains the same.

Name: As output rises,average fixed cost A)rises. B)falls. C)remains the same.
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Question

Quizplus · Accepted Answer

Average fixed cost (AFC) is calculated by dividing the fixed cost by the output. Since fixed cost remains the same regardless of the level of output, as output rises, the fixed cost is spread over a larger number of units, causing the average fixed cost to fall.

As Output Rises,average Fixed Cost