Average Fixed Costs

question 45

Multiple Choice

Average fixed costs:

• A) rise when production increases.
• B) rise when production decreases.
• C) rise when total costs increase.
• D) rise when average variable costs increase
• E) never rise.

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Definitions:

Nonlinear Relation

A relationship between two variables where the change in one variable does not result in a proportional change in the other variable.

Quantity Supplied

Refers to the amount of a good or service that producers are willing and able to sell at a given price over a specified period of time.

Quantity Demanded

Quantity demanded refers to the total amount of a good or service that consumers are willing to purchase at a given price point.

Positively Related

A relationship where an increase in one variable leads to an increase in another.