Which of the Following Is Not True of Fixed Costs

question 85

Multiple Choice

Which of the following is not true of fixed costs?

• A)Average fixed costs diminish as output increases.
• B)Fixed costs increase AVC.
• C)Fixed costs are the difference between SAC and AVC.
• D)Fixed costs have no effect on marginal cost.

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Definitions:

Trade Deficits

A situation where a country's imports exceed its exports, leading to more money leaving the country than coming in.

Money Supply

The total amount of monetary assets available in an economy at a specific time.

Gold Standard

A financial system in which the value of a nation's paper currency is directly tied to gold.

Lower Prices

A decrease in the cost of goods or services, often resulting from factors such as increased competition, lower production costs, or decreased demand.