How Do Fixed Costs React in Total and on a Per

question 318

Multiple Choice

How do fixed costs react in total and on a per unit basis?

• A)Fixed costs remain constant in total and decrease per unit as production increases.
• B)Fixed costs remain constant in total and on a per unit basis as production increases.
• C)Fixed costs increase in total as production increases and remain constant on a per unit basis.
• D)Fixed costs increase in total and on a per until basis.

---

Definitions:

Efficient Scale

Efficient scale is the level of production at which a firm can produce its product at the lowest possible average total cost, optimizing resources and operational efficiency.

Government Policy

Strategies and actions taken by the government to influence or to directly manage the economy or certain sectors of it.

Output

The total quantity of goods and services produced by an economic system over a specific time period.

Double Scoop

A serving of ice cream consisting of two scoops, often of different flavors, placed together in a cone or cup.