O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2025 · Q161 Mark

The diagram shows the average total costs (ATC) and average fixed costs (AFC) for a firm. Which statement is correct?

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AAt output X, average variable costs are lower than average fixed costs.

BAt output Y, total variable costs are greater than total fixed costs.

CBetween outputs W and Z, total fixed costs are falling.

DBetween outputs W and Y, average variable costs have not changed.

✓ Correct answer

A: At output X, average variable costs are lower than average fixed costs.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2025 Paper 1 Variant 1, question 16.

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