Question

In short run when the level of production increases, average fixed cost will____.

• A. remain same
• B. decrease
• C. increase
• D. all the three possible depending upon the merit of case

Answer 1

Answer: (B)

decrease

The AFC curve is asymptotic to to both the x and y axis as the fixed cost can never be 0 since fixed cost is positive. It slopes downwards throughout its length from left to right showing continuous fall in average fixed cost with an increase in output.