Average fixed cost:
A) initially declines, reaches a minimum, and then begins to increase as output increases.
B) increases continuously as output increases.
C) declines continuously as output is expanded.
D) keeps constant as output is expanded.

Question

Quizplus · Accepted Answer

Average fixed cost declines continuously as output is expanded because the total fixed cost is spread over an increasing number of units, reducing the cost per unit.

Average Fixed Cost