1. As a firm's output increases, average fixed cost (FC/Q) should decline. It can never increase. True or false, and why?
2. Describe why the following statement is false: If 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) should be rising also.
3. Describe why following statement is false: If firm's output is increasing and marginal cost is rising, then average variable cost (VC/Q) should be rising also.