The production cost that varies inversely with output is the

ruathebadgyal

2 months ago

The production cost that varies inversely with output is the average fixed cost (AFC).
Here is the simple logic:
Fixed Costs (like rent or machinery) stay the same no matter how much you produce.
As output increases, you are spreading those same fixed costs over more units.
Therefore, the cost per unit (average fixed cost) goes down.
Conversely, if output decreases, the average fixed cost goes up because fewer units have to "carry" the weight of the total fixed expense.