At an output of zero, ________ is zero.
A) total fixed cost
B) total variable cost
C) total cost
D) All of the above are correct.

Question

Quizplus · Accepted Answer

At an output of zero, total variable cost is zero because variable costs vary with the level of output. If there is no output, there are no variable costs. Fixed costs, however, do not change with the level of output and are incurred even if the output is zero, so total fixed cost is not zero. Total cost includes both fixed and variable costs, so it is not zero at an output of zero due to the presence of fixed costs.

At an Output of Zero, ________ Is Zero