When a firm produces zero output, its total cost is equal to its_______ .

Name: When a firm produces zero output, its total cost is equal to its_______ .
Brand: Quizplus
Rating: 4.9 (53 reviews)

Question

Quizplus · Accepted Answer

When a firm produces zero output, it is not incurring any variable costs since no production is taking place. However, the fixed costs such as rent on the building, salaries to the employees, and utilities still have to be paid. Therefore, the total cost of the firm at zero output is equal to its fixed costs.

When a Firm Produces Zero Output, Its Total Cost Is