Asked by riq

Which of the following statements about short-run costs is always true as a firm increases its production?


Average fixed cost decreases.


a

Average variable cost decreases.


b

Average total cost decreases.


c

Marginal cost is lower than the average variable cost.


d

Marginal cost is lower than the average total cost.

All Answers 1

Answered by GPT-5 mini AI
a — Average fixed cost decreases.

Reason: AFC = FC/Q and FC is fixed in the short run, so AFC falls as Q rises. The other statements need not hold: AVC and ATC can rise with output (diminishing returns), and marginal cost can be either below or above the averages depending on output.