ATC must falls simply because AFC always falls. Comment
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Average Fixed Cost:
In a market, when a firm makes production activities, such activities incurred different types of costs that are variable cost and fixed cost. Fixed cost is explained by the cost before starting the production process as it does not change with the output level. Average Fixed cost is the per-unit value of fixed cost at the different output levels.
Answer and Explanation: 1
The average total cost is the sum of the average fixed cost and average variable cost, due to which an increase or decrease in the AFC does not always mean the same impact on the ATC because ATC also depends upon the value of AVC and the combined changes in AVC and ADFC will provide the actual change in the ATC.
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