With increase the level of output. AFC goes on falling. True or false? – InterviewSolution

InterviewSolution

1.	With increase the level of output. AFC goes on falling. True or false? Explain.
Answer» The given statement is true. AFC = TFC / Q. With the increase in output only the denominator of the fraction increases as TFC is fixed or constant at all output levels. Hence, the fraction or AFC decreases with the increase in output.

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