CUET Preparation Today
If the average fixed cost of production is the fixed cost per unit of output produced. Then it will _____. |
Remains same at all levels of output. Increases with increase in the level of output. Decreases with increase in level of output. First increases and then decreases as the output is increased. |
Decreases with increase in level of output. |
The correct answer is Option (3) → Decreases with increase in level of output. AFC=TFC/ Q where
As production (Q) increases, the same fixed cost is spread over more units, so AFC continuously falls. |
