Average fixed costs:
A) rise when production increases.
B) rise when production decreases.
C) rise when total costs increase.
D) rise when average variable costs increase
E) never rise.

Question

Quizplus · Accepted Answer

Average fixed costs are total fixed costs divided by the quantity of output. Since fixed costs do not change with changes in production, a decrease in production would result in higher average fixed costs.

Average Fixed Costs