The _____ cost curve is NOT affected by diminishing returns.
A)average fixed
B)average variable
C)average total
D)marginal

Question

Quizplus · Accepted Answer

Diminishing returns only affects the short-run marginal and average variable cost curves, as additional units of the variable input add less and less to output due to capacity constraints in the short-run. The average fixed cost, which is the fixed cost per unit of output, remains constant regardless of the level of output because it is spread over more units as production increases. Therefore, the correct answer is A) average fixed cost.

The _____ Cost Curve Is NOT Affected by Diminishing Returns