Average costs curves initially fall
A)Due to declining average fixed costs
B)Due to rising average fixed costs
C)Due to rising fixed costs
D)Due to rising marginal costs

Question

Average costs curves initially fall​
A)​Due to declining average fixed costs
B)Due to rising average fixed costs
C)Due to rising fixed costs
D)​Due to rising marginal costs

Quizplus · Accepted Answer

The average cost curve initially falls due to declining average fixed costs. When producing more, fixed costs are spread over a larger quantity of output, causing average fixed costs to fall. This leads to a downward slope in the beginning of the average cost curve.

Average Costs Curves Initially Fall​

Average Costs Curves Initially Fall