A is corrent. The requirement is to identify the cost that would decrease if production levels were increased within the relevant range. As the number of units produced increases, the fixed costs are spread over more products, which reduces the per-unit cost.
B is incorrect. Total fixed costs are constant over the relevant range.
C is incorrect. Variable cost per unit is fixed over the relevant range.
D is incorrect. Total variable costs would increase with an increase in production.
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