Comment on the following statement: "Average fixed cost falls as output rises, but average fixed cost will never be equal to zero."
What will be an ideal response?
The statement is true. Because average fixed cost is equal to fixed cost divided by the number of units of output, average fixed cost declines as output rises. However, as long as fixed cost is not equal to zero, average fixed cost cannot be equal to zero.
You might also like to view...
At the point at which the consumption function intersects the 45 degree reference line
A) planned real consumption of real disposable income equals zero. B) planned real saving equals real disposable income. C) planned real consumption equals real disposable income. D) equilibrium output is supply determined equilibrium output is determined by both.
Which of the following statements is true of a barter system? a. In a barter system economy, no rates of exchange are defined
b. In a barter system economy, there are as many different rates of exchange as there are pairs of goods to trade. c. In a barter system economy, rates of exchange are expressed in goods per dollar. d. In a barter system economy, rates of exchange are expressed in dollars per good. e. In a barter system economy, rates of exchange are denominated in gold or silver.