Which of the following does NOT describe average fixed cost?
A) It is a per unit measure of fixed cost.
B) It can be graphed as a horizontal line, with dollars on the vertical axis and quantity on the horizontal axis.
C) It decreases as output increases.
D) It can be calculated by dividing total fixed cost by the level of output produced.

Question

Quizplus · Accepted Answer

Average fixed cost (AFC) decreases as output increases because the total fixed costs are spread over a larger number of units. It cannot be graphed as a horizontal line; that description applies to total fixed costs, not average fixed costs.

Which of the Following Does NOT Describe Average Fixed Cost