As the level of output increases, the average fixed cost of a firm will

Assessment: JAMB UTME - Economics - 2009 Subject: Economics

Question 1 Report

As the level of output increases, the average fixed cost of a firm will
Answer Details
As the level of output increases, the average fixed cost of a firm will continue to decrease. This is because fixed costs are spread over a larger output, resulting in a smaller portion of fixed costs being assigned to each unit produced. In other words, as output increases, the fixed cost per unit decreases, which leads to a decrease in the average fixed cost.
Read lesson note on The Theory Of Production (JAMB)
Read lesson note on Theory Of Costs (JAMB)
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