What does average fixed cost fall with increase in output?

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: How are the marginal cost curve and average variable cost (AVC) curve related? Explain why the AVC…

A: Marginal Cost(MC) is the increment in the total cost(TC) due to a unit increment in the amount of…

Q: How is the difference between average total cost and average variable cost impacted by an increase…

A: Average total cost is the total cost per unit whereas average variable cost is the total variable…

Q: What is a average total cost? : What is a Marginal cost?

A: The average total cost is the total cost per unit of output. It is calculated by dividing the total…

Q: What are the variable costs?

A: Variable cost refers to those costs that are changed along with the changes in the production. In…

Q: What explains why the long run average cost curve is u-shaped

A: First of all average cost fall in the beginning because the factor of production or the capital used…

Q: Why can the distinction between fixed costs and variable costs be made in the short run?

A: Understanding the difference between fixed costs and variable costs is important for settling on…

Q: What is the relationship between the Average Fixed Cost (AFC) curve and the Marginal Cost (MC)…

A: * ANSWER :-  * The OPTION A (There is no relationship between fixed costs and marginal costs) is…

Q: Why does as output increases, average variable cost initially declines and eventually begins to…

A: In an economy, the cost is analyzed in different ways, such as total cost, marginal cost, average…

Q: for these two graphs answer the following question what is the fixed cost?

A: Cost refers to the expenditure incurred by the producer for producing a given level of output. There…

Q: Briefly describe the flow of costs in a manufacturing company?

A: Cost flow refers to how or the direction by which costs pass through a organization. Usually, the…

Q: What are Fixed Costs?

A: A company mainly faces two type of costs known as fixed cost and variable cost. These two costs are…

Q: Show me how to arrive at Average Variable Cost?

A: Total variable cost varies with the level of production.

Q: Define and graph total cost, average costs, and marginal cost.

A: The cost of producing/manufacturing all the units of a good by a firm is estimated by the total…

Q: What happens to fixed cost as the quantity produced increases?

A: In the market, when a firm makes production activities, there are various costs incurred during this…

Q: Assume that the marginal cost of production is greater than the average variable cost. Can you…

A: The marginal cost of production is the incremental cost incurred when an additional unit of a good…

Q: Fixed costs can be defined as costs that

A: A fixed cost(FC) is the cost that does not change with the decrease or increase in the number of…

Q: What is another term for marginal costs

A: Marginal cost refers to the additional cost incurred by firm or a producer when one additional unit…

Q: When examining the costs faced by a business, explain how economists distinguish between the short…

A: First part The contrast between the short and long runs is critical in economics. It turns out that…

Q: Explain Fixed costs versus variable costs and give an example?

A: Fixed Cost: It is the cost that is incurred for purchasing fixed factors of production. It is…

Q: discuss more about fixed and variable costs.

A: TC(Total) is the cost which is incurred by a firm in producing some specific level of output. It is…

Q: Why is the average cost a U shape

A: Cost refers to the amount of money required to produce the goods and services by the various factors…

Q: Mention and explain the cost components certainly do not exist in the long run?

A: The cost components include fixed costs and variable costs.  Variable costs are the costs which vary…

Q: You are told that the marginal cost of production is increasing. Is it possible to determine whether…

A: Marginal cost of production refers to the additional cost of producing one extra unit of output,…

Q: Why is the short run marginal cost curve U- Shaped?

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Q: Explain how a company could choose to get bigger, yet lower their average costs?

A: Average cost: It is average cost incurred for producing a good.

Q: Can total cost of the firm be zero? if yes what's the production point at this level

A: Total cost of the firm is the combination of fixed cost of the firm such as rent of the workplace…

Q: What is the relation between fixed cost and total cost ??

A: Fixed cost is the cost that is to occur on the fixed expenses whether there is production or not.…

Q: How do you find total fixed cost?

A: Total cost of production includes all the fixed cost of production and the variable cost of…

Q: If production increases, what happens to average variable cost (AVC), does it increase only,…

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Q: Explain the relationship between the average cost and the marginal cost?

A:

Q: Explain how a firm is able to deal with both fixed and variable costs at the same time

A: Fixed cost is the cost of production which does not change or constant whatever the amount of good…

Q: marginal cost curve and average variable cost (AVC) curve related?

A: The Marginal Cost shows the cost incurred on producing an extra unit of output. The Average Variable…

Q: Give an quantitative example of marginal and average cost.

A: Average cost is the equivalent of total fixed cost (TFC) and total variable costs (TVC) divided by…

Q: Give some examples of the variable costs?

A: Variable Costs(VC) are those costs that varies with the quantity of output produced. If Q is the…

Q: Why is the Average Variable cost U-shaped

A: Costs are the expenses that firms incur in the production of goods and services. A firm typically…

Q: How does fixed cost affect marginal cost? Why is this relationship important?

A: Fixed cost is the cost which does not change with the change in the output. Marginal cost is the…

Q: What is the difference between marginal product and marginal cost?

A: The marginal product is the additional output produced by an additional unit of input in the process…

Q: Differentiate between Fixed and Variable Costs?

A: Difference between fixed and variable costs Fixed Costs  Variable Costs 1. They are incurred on…

Q: Why does INCREASING COST CONDITION is the best while DECREASING COST CONDITION is worst?

A: Total cost: The term total cost encompasses fixed costs and variable costs. here, the fixed cost…

Q: Fill in the blanks in the following table: Total cost Total fixed cost Total varjable cost Average…

A: Cost: The term cost refers to the situation under which a firm occurs various expenses during the…