As production increases and the fixed cost is divided by larger quantities of output, this leads to lower average fixed cost.This is referred to as the effect.
A)diminishing returns .
B)spreading
C)constant cost
D)increasing returns

Question

Quizplus · Accepted Answer

Spreading refers to the phenomenon where as production increases, fixed costs are spread out over larger quantities of output, causing a decrease in average fixed cost. This is a common concept in economics and accounting. The other choices are not relevant to this scenario; diminishing returns refers to the point at which adding more inputs leads to a lower increase in output, constant cost refers to a scenario where the total cost does not change regardless of the quantity produced, and increasing returns refers to the point at which adding more inputs leads to a higher increase in output.

As Production Increases and the Fixed Cost Is Divided by Larger