The Average Fixed Cost Curve Always Has a Negative Slope

question 14

Multiple Choice

The average fixed cost curve always has a negative slope because:

• A)marginal costs are below average fixed costs.
• B)average variable costs exceed marginal costs.
• C)total fixed costs always decrease.
• D)total fixed costs do not change as output increases.

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Definitions:

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no net profit or loss.

Break-even

The moment total expenditure equals total earnings, resulting in neither a financial gain nor a loss.

Monthly Unit Sales

The total number of individual items or products sold by a business during a month.

Break Even

The moment when the sum of all expenses equals the sum of all revenues, eliminating any profit or loss.