Many people have turned to the Internet to get the news. This has caused the circulation numbers of newspapers to fall drastically, which in turn caused their

Question

Quizplus · Accepted Answer

When circulation numbers of newspapers fall, their revenue decreases but their fixed costs (such as rent, machinery, and salaries for permanent staff) remain unchanged. This means they are spreading these fixed costs over fewer units (newspapers sold), causing the average fixed cost per unit to increase.

Many People Have Turned to the Internet to Get the News