Figure 11-4

-Refer to Figure 11-4.What happens to the average fixed cost of production when the firm increases output from 150 to 200?
A)It remains constant.
B)It rises.
C)It falls.
D)It could rise or fall depending on what happens to total cost.

Question

Figure 11-4
 
-Refer to Figure 11-4.What happens to the average fixed cost of production when the firm increases output from 150 to 200?
A)It remains constant. 
B)It rises. 
C)It falls. 
D)It could rise or fall depending on what happens to total cost.

Quizplus · Accepted Answer

The average fixed cost (AFC) decreases as output increases because fixed costs are spread over a larger number of units.

Figure 11-4 -Refer to Figure 11-4.What Happens to the Average Fixed Cost