Which of the following will become smaller and smaller as the firm expands output?

A) average total cost
B) average fixed cost
C) marginal cost
D) total fixed cost

Average Fixed Cost

The constant expenses associated with production (expenses unaffected by output levels) divided by the volume of production.

Total Fixed Cost

The sum of all costs that do not change with the level of output or activity over a short period, such as rent, salaries, and equipment maintenance costs.

Average Total Cost

The total cost of production divided by the number of units produced.