A firm's average fixed cost when producing 2000 units of output equals $10. When only 1000 units of output are produced, what is the average fixed cost?
A) $5
B) $10
C) $20
D) $25

Question

Quizplus · Accepted Answer

Fixed costs do not change with the level of output, so the average fixed cost per unit increases or decreases inversely with output. If the average fixed cost is $10 at 2000 units, it remains $10 at 1000 units.

A Firm's Average Fixed Cost When Producing 2000 Units of Output