Question

As the level of output increases, the difference between the value of average total cost and average variable cost...

1. decreases because the average fixed cost decreases as output increases.
2. decreases because the average total cost and average variable cost decrease with output.
3. remains constant because the average total cost and average variable cost both increases with output.
4. remains constant because the average fixed cost remains the same as output increases.
5. increases because the average total cost increases with output but the average fixed cost decreases with output.