Average Fixed Costs

question 1

Multiple Choice

Average fixed costs:

• A) increase as the quantity produced increases.
• B) decline for a while as output increases and then begin to rise again.
• C) decrease steadily as output increases.
• D) are less than average variable costs at all output levels.
• E) None of these alternatives is correct.

---

Definitions:

Expenses

Costs incurred in the process of earning revenue, such as rent, utilities, and salaries.

Stockholders' Equity

The remaining interest in a corporation's assets after all liabilities are subtracted, which signifies ownership.

Accounts Receivable

Accounts receivable represents money owed to a business by its customers for goods or services delivered but not yet paid for.

Business Activities

Various actions undertaken by a company to operate and manage its business, including operating, investing, and financing activities.