True or false-trends in a firm average fixed cost

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1. As a firm's output increases, average fixed cost (FC/Q) must decline. It can never increase. True or false, and why?

2. Explain why the following statement is false: If a firm's output is increasing and marginal cost (change in total cost divided by change in quantity) is rising, then average total cost (TC/Q) must be rising also.

3. Explain why the following statement is false: If a firm's output is increasing and marginal cost is rising, then average variable cost (VC/Q) must be rising also.

Reference no: EM1316351

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