Asked by Pasha Harmidy on Jun 09, 2024
Verified
Average fixed costs diminish continuously as output increases.
Average Fixed Costs
Costs that do not change with the level of output and are spread over the units of output, thus decreasing per unit as production increases.
Output Increases
Output increases refer to a situation where there is a rise in the quantity of goods or services produced by a company or within an economy.
- Gain insight into how variable costs relate to the amount of output produced.
- Analyze how cost concepts like marginal cost and average cost are related to output level.
Verified Answer
KM
khanyie mkhahJun 11, 2024
Final Answer :
True
Explanation :
Average fixed costs diminish continuously as output increases because the total fixed costs are spread over a larger number of units, reducing the cost per unit.
Learning Objectives
- Gain insight into how variable costs relate to the amount of output produced.
- Analyze how cost concepts like marginal cost and average cost are related to output level.