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In the short run, how does average fixed cost behave as output increases?
  • a)
    It remains constant.
  • b)
    It increases.
  • c)
    It decreases.
  • d)
    It fluctuates randomly.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
In the short run, how does average fixed cost behave as output increas...
In the short run, average fixed cost (AFC) decreases as output increases. This is because fixed costs are spread over a larger number of units as production increases, resulting in a lower per-unit cost.
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In the short run, how does average fixed cost behave as output increases?a)It remains constant.b)It increases.c)It decreases.d)It fluctuates randomly.Correct answer is option 'C'. Can you explain this answer?
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