Question on: JAMB Economics - 2002
As a firm increases its output, the average fixed cost?
A
tends to rise continuously
B
remains constant
C
rises and then falls
D
tends to decreased continuously
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Correct Option: D
Average Fixed Cost (AFC) is calculated by dividing total fixed costs by the quantity of output produced. As output increases, the fixed costs are spread over a larger number of units. This results in a continuous decrease in the AFC.
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