Average Fixed Cost

question 91

Multiple Choice

Average fixed cost

• A)increases as output increases.
• B)decreases as output increases.
• C)increases if marginal cost is increasing.
• D)increases if marginal cost is greater than average fixed cost.

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Definitions:

Profit Margin

A financial metric that measures the amount by which revenue from sales exceeds costs in a business, expressed as a percentage.

Net Income

The total profit (or loss) of a company after all expenses and taxes have been subtracted from total revenues.

Net Sales

The total revenue generated from sales of goods or services, minus returns, allowances, and discounts.

Price-Earnings Ratio

A measure used to value a company that shows how much investors are willing to pay per dollar of earnings.