As output rises,
A)AFC rises.
B)AFC falls.
C)AFC remains the same.
D)there is no way of determining what happens to AFC.

Name: As output rises, A)AFC rises. B)AFC falls. C)AFC remains the same. D)there is no way of determining what happens to AFC.
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Question

Quizplus · Accepted Answer

As output rises, total fixed costs remain the same while total variable costs rise. Thus, the average fixed cost (AFC) must fall since it is being spread over a larger output.

As Output Rises