Average Fixed Cost

question 69

Multiple Choice

Average fixed cost:

• A) declines continuously as output increases.
• B) is always greater than average variable cost.
• C) equals the difference between average total cost and average variable cost.
• D) is characterized by both (a) and (c).

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Definitions:

Overall Cost

A comprehensive term that refers to the total expenditure associated with acquiring, operating, and maintaining an asset or service over its entire lifespan.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, often used as an indicator of inflation.

Cost of Living

The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

Real Value

The value of an object or service adjusted for inflation, representing its purchasing power.