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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost4 Marks
Question
What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced?
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Answer

  1. AFC falls continuously as more and more output is produced.
  2. AVC falls initially and after a level of output, starts rising as more and more output is produced.

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