In which of the following ways do advertising and other selling costs affect a firm's cost curves? i. Advertising expenditures increase total fixed costs.
Ii) Selling costs increase total fixed costs.
Iii) Advertising and other selling costs per unit of output decrease as output increases.

Question

Quizplus · Accepted Answer

Advertising expenditures and selling costs increase total fixed costs because they are incurred regardless of the level of output. As output increases, the per unit cost of these expenses decreases, spreading the fixed costs over a larger number of units.

In Which of the Following Ways Do Advertising and Other