One feature of the average fixed cost is that it

A. falls continuously but is never equal to zero.
B. is U-shaped and intersects the Y-axis
C. rises and falls faster than the marginal cost
D. is always higher than the average variable cost

Correct Answer:

Option A = falls continuously but is never equal to zero.

Explanation

The average cost curve keeps falling as the level of output rises. It remains positive, and never reaches a zero value, and never turns negative.