increases as output increases
remain same at all levels of output
decreases with increase in output
All of the above
Answer is Wrong!
Answer is Right!
The correct answer is: B. remain same at all levels of output.
Average fixed cost (AFC) is the total fixed cost divided by the number of units produced. Fixed costs are costs that do not change with the level of output, such as rent, insurance, and depreciation. As output increases, AFC decreases because the fixed cost is spread over a larger number of units.
Option A is incorrect because AFC decreases as output increases. Option C is incorrect because AFC does not decrease with increase in output. Option D is incorrect because only option B is correct.