Fixed costs per unit ___ as output increases.

**The reasoning** Fixed costs are expenses that don't change with production level — like rent, salaries, or equipment. Whether you produce 10 items or 1,000 items, you pay the same total amount. Here's the key: **Fixed cost *per unit* = Total fixed cost ÷ Number of units** Example: Your factory rent is ₦100,000/month (fixed). - Produce 100 units → ₦100,000 ÷ 100 = ₦1,000 per unit - Produce 1,000 units → ₦100,000 ÷ 1,000 = ₦100 per unit As output increases, you're spreading the same fixed cost over more units, so the cost *per unit* **falls**. This is called **economies of scale**. **Why the wrong options tempt you** **A) Rise** — You might confuse this with *total costs*, which do rise with output. But fixed costs *per unit* work differently. **C) Stay same** — This describes *variable costs* per unit (like raw materials), not fixed costs. **D) Double** — No mathematical reason supports this; it's just a distractor. **Quick takeaway** *Fixed costs per unit fall as you produce more — you're sharing the burden across more products.*