As a ﬁrm expands its output in the short run, average ﬁxed costs fall at ﬁrst, but they will eventually rise.

Name: As a ﬁrm expands its output in the short run, average ﬁxed costs fall at ﬁrst, but they will eventually rise.
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Question

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Average fixed costs continuously decrease as output increases because the total fixed costs are spread over a larger number of units, and they do not rise at any point in the short run as output increases.

As a ﬁRm Expands Its Output in the Short Run