At low output levels a firm's average total cost tends to be high because:
A)marginal costs are increasing
B)variable costs are spread over only a few units of output
C)average fixed cost is large
D)there is a shortage of experienced workers

Question

Quizplus · Accepted Answer

At low output levels, average fixed costs are high because the fixed costs are spread over a small number of units, making the average total cost high.

At Low Output Levels a Firm's Average Total Cost Tends