As a firm produces more and more CDs, the average cost of producing each CD falls. A curve showing the behavior of the average cost of a CD as more CDs are produced
A) would be positively sloped.
B) would be horizontal.
C) would be positively and then negatively- sloped.
D) would be negatively sloped.

Question

Quizplus · Accepted Answer

This is because as more CDs are produced, there are more opportunities to spread the fixed cost of production over a larger number of units, leading to lower average costs. This results in a negative slope for the average cost curve.

As a Firm Produces More and More CDs, the Average