Average fixed cost
A)does not change as total output increases or decreases.
B)varies directly with total output.
C)falls continuously as total output expands.
D)rises as the output is expanded.

Question

Quizplus · Accepted Answer

Average fixed cost (AFC) is the fixed cost per unit of output. As total output increases, fixed cost is spread over a larger number of units, which causes AFC to fall continuously. Therefore, option C is correct. It does not remain constant, change directly with total output, or rise with expanded output, so options A, B, and D are incorrect.

Average Fixed Cost