Average fixed costs:
A) increase as the quantity produced increases.
B) decline for a while as output increases and then begin to rise again.
C) decrease steadily as output increases.
D) are less than average variable costs at all output levels.
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

Average fixed costs decrease steadily as output increases because the total fixed costs are spread over a larger number of units, reducing the cost per unit.

Average Fixed Costs