Question

In the short term, as production reaches high levels, all per unit costs increase except average...

In the short term, as production reaches high levels,

all per unit costs increase except average fixed cost.

all per unit costs increase except average variable cost.

all per uni costs increase except marginal cost.

all per unit costs increase.

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Answer #1

Answer -
Option (1) - All per unit cost increase except average fixed cost.
Explanation -
In case of fixed costs when productions reaches at high level it doesn't increase as increase in production quantity. In case of variable costs which includes labour,raw material etc.with increase in production units additional units of labour and raw material are utilised so variable cost as well as total cost will also increase.In case of marginal cost it is cost of producing additional unit.So marginal cost will also increase with successive units of production.but average fixed cost remains constant.

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