WAEC - Economics (2023 - No. 37)
If a firm retrenches some of its factory workers its
average fixed cost may increase
variable cost will decline
marginal cost may increase
fixed cost is likely to increase
Forklaring
If a firm retrenches some of its factory workers, its variable cost will decline. This is because variable costs are costs that vary with the level of output. When the number of workers is reduced, the amount of variable costs will also be reduced.