A firm's average fixed cost must always be positive.

Name: A firm's average fixed cost must always be positive.
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Question

Quizplus · Accepted Answer

Average fixed cost is calculated by dividing the total fixed costs by the quantity of output produced. Since total fixed costs are always positive (as they represent the costs that do not change with the level of output, such as rent, salaries, etc.), and quantity of output is positive, the average fixed cost must also always be positive.

A Firm's Average Fixed Cost Must Always Be Positive