Which of the Following Is True of the Average fiXed

question 15

Multiple Choice

Which of the following is true of the average fixed cost for a firm?

• A) The average fixed cost initially rises but then falls as output expands.
• B) The average fixed cost is equal to total fixed cost divided by total output.
• C) The average fixed cost remains constant as output expands.
• D) The average fixed cost is the same as the variable cost when no output is produced.

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of a company.

Operating Activities

Financial transactions and events related to the core business functions of a company, as reported in the cash flow statement.

Accounts Receivable

Accounts receivable represents money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Direct Approach

A communication method in which the main point or decision is presented at the beginning of the message, followed by supporting details.