O-LevelEconomicsMicroeconomic decision makers2281/12 · May/June 2020 · Q121 Mark

The table shows total fixed and total variable costs at different levels of output for a firm. What happens as output rises? [Figure 12.1]

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AAverage fixed cost falls.

BAverage fixed cost rises.

CAverage variable cost remains constant.

DAverage variable cost rises.

✓ Correct answer

A: Average fixed cost falls.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2020 Paper 1 Variant 2, question 12.

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