If output decreases
A)total fixed costs will remain the same.
B)total variable costs will increase.
C)per-unit fixed costs will decrease.
D)all of these are correct

Question

Quizplus · Accepted Answer

Total fixed costs will remain the same regardless of the output level as they do not vary with changes in output. Total variable costs may increase or decrease depending on the specific situation, but it is not guaranteed. Per-unit fixed costs will increase as output decreases because fixed costs are spread over fewer units of production. Therefore, only choice A is correct.

If Output Decreases