In the short run,when a firm produces zero output,total cost equals
A)Zero.
B)Variable costs.
C)Fixed costs.
D)Marginal costs.

Question

Quizplus · Accepted Answer

In the short run, fixed costs are still incurred even if the firm produces zero output. Therefore, total cost equals fixed costs. Variable costs are only incurred when the firm produces output, and marginal costs are the additional costs of producing one more unit of output, so they are not relevant when output is zero.

In the Short Run,when a Firm Produces Zero Output,total Cost