Figure 11-3 -Refer to Figure 11-3.What Happens to the Average Fixed Cost

question 162

Multiple Choice

Figure 11-3
-Refer to Figure 11-3.What happens to the average fixed cost of production when the firm increases output from 150 to 200?

• A) It remains constant.
• B) It rises.
• C) It falls.
• D) It could rise or fall depending on what happens to total cost.

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Definitions:

Liquidity

A measure of how easily assets can be converted into cash without affecting their market price.

Accounts Receivable

Denotes the funds that customers owe a business for received goods or services that remain unpaid.

Notes Receivable

Claims held by a creditor that are supported by promissory notes, representing a right to receive payments from debtors.

Correcting Entry

An entry made in the accounting records to amend a previously made mistake or incorrect transaction.