Question

Average fixed cost
a. equals marginal cost when an average total cost is at its minimum. b. may be found for any output by adding average variable cost and average total cost.
c. graphs as a U-shaped curve.
d. declines continually as output increases.

Answer 1

Answer:

d. declines continually as output increases.

Explanation:

Fixed costs remain constant throughout a period regardless of output level.  Average fixed costs are obtained by dividing fixed costs by the total output.  Because fixed costs do not change,  average fixed costs will be influenced mostly by the production level.

A large output means that fixed costs will be spread in many units. The result is a reduction in average fixed costs. When the output is large, a firm enjoys economies of scale.  A small output will result in high fixed average costs. A Fixed amount will be shared among a fewer number of units.

Answer 2

Answer:

d. declines continually as output increases.