MCQ
What happens as output rises?
A. Average fixed cost falls.
B. Average fixed cost rises.
C. Average variable cost remains constant.
D. Average variable cost rises.
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MCQ
What happens as output rises?
A. Average fixed cost falls.
B. Average fixed cost rises.
C. Average variable cost remains constant.
D. Average variable cost rises.
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B. Average fixed cost rises.
As output increases in the short run, fixed costs remain constant, so the average fixed cost (AFC) rises because it is being spread over a larger quantity of output.
Answer:
It's answer is option C Average variable cost remains constant