Average fixed costs in the short run
A) increase as the quantity produced increases.
B) decrease as the quantity produced increases.
C) first decrease, then increase eventually as the quantity produced increases.
D) first increase, then decrease eventually as the quantity produced increases.

Question

Quizplus · Accepted Answer

Average fixed costs decrease as the quantity produced increases because fixed costs are spread over a larger number of units, reducing the cost per unit.

Average Fixed Costs in the Short Run