Question

In: Economics

In the short run it is impossible for an expansion of output to increase Multiple Choice...

In the short run it is impossible for an expansion of output to increase

Multiple Choice

  • average total cost.

  • average fixed cost.

  • marginal cost.

  • average variable cost.

Solutions

Expert Solution

Ans.- (B)

Total fixed cost is the cost that doesn't change with a change in the level of output.

Average fixed cost = total fixed cost/quantity

Since total fixed cost can't change in the short run so an increase in output will only lead to a lower average fixed cost and therefore average fixed cost can't increase with an expansion of output.

Rahul Sunny answered 2 years ago
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