Average fixed cost ___________.

increases as output increases

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diminishes as output increases

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remains the same whatever the level of output

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none of these

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Solution

The correct option is B diminishes as output increases
Average fixed costs are found by dividing total fixed costs by output. As fixed costs is divided by increasing output , average fixed costs will continue to fall. Thus Average fixed cost diminishes as output increases.

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Average fixed cost ___________.

The correct option is B diminishes as output increasesAverage fixed costs are found by dividing total fixed costs by output. As fixed costs is divided by increasing output , average fixed costs will continue to fall. Thus Average fixed cost diminishes as output increases.

The correct option is B diminishes as output increases
Average fixed costs are found by dividing total fixed costs by output. As fixed costs is divided by increasing output , average fixed costs will continue to fall. Thus Average fixed cost diminishes as output increases.