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Which of the following statements about fixed cost are likely to be true?
1. Fixed cost per unit of output increases as the level of output decreases but is still within its relevant range
2. Total fixed cost will always stay the same from one year to the next if output remains within its relevant range
3. Total fixed cost will not change when the level of output changes unless the level of output moves outside its relevant range
Please explain why 2 is wrong.
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