Final answer:
The statement is true because as production increases, the fixed cost per unit decreases due to the spread of fixed costs over more units, embodying the concept of economies of scale.
Step-by-step explanation:
The statement that a fixed cost per unit decreases as the production level increases is true. At zero production, the fixed costs, such as rent or salaries, remain constant regardless of the quantity produced. As production increases, the same fixed costs are spread over more units, resulting in a lower fixed cost per unit. This concept is known as economies of scale, which is common in many industries.
As the scale increases, businesses can benefit from lower average costs, similar to how warehouse stores operate. However, it is important to note that while the fixed cost per unit decreases, the total fixed costs remain unchanged; only the allocation per unit changes.