As Output Increases, Fixed Costs Per Unit Will Also Increase

question 86

True/False

As output increases, fixed costs per unit will also increase.

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Definitions:

Profit-Maximizing

The process by which a company determines the price and output level that returns the highest profit.

Loss-Minimizing

A strategy or position where a firm aims to reduce its losses to the lowest possible level under adverse conditions, often by adjusting production.

Zero Economic Profits

Zero economic profits occur in a competitive equilibrium when firms earn just enough revenue to cover their total costs, including the opportunity costs.

Short Run

A period of time during which at least one of a firm's inputs is fixed, limiting its ability to increase production.