Q1. As output increases, Average Fixed Cost tend to:

a) Decrease, then increase

b) Remain flat

c) Decrease

d) Increase

Q2. A firm has fixed costs of $10,000 and the variable cost of producing 1000 units is $5,000. What is the Average Cost when the firm is producing 1000 units?

a) 15

b) 50

c) 150

d) 10

Q3. If the marginal cost is greater than the average cost, then the AC curve is:

a) Rising

b) Neither rising or failing

c) At the minimum point

d) Failing