Which of the following statements is true?
A)As output increases, average fixed cost becomes smaller and smaller.
B)Average fixed cost does not change as output increases.
C)The marginal cost curve intersects the average fixed cost curve at its minimum point.
D)When marginal cost is greater than average fixed cost, average fixed cost increases.

Question

Quizplus · Accepted Answer

Average fixed cost is the fixed cost per unit of output. As output increases, fixed cost remains the same but is spread across a larger quantity of output. Therefore, average fixed cost becomes smaller and smaller.

Which of the Following Statements Is True