Use the following to answer question(s):
Exhibit: Total Revenue, Total Cost, and Economic Profit

-(Exhibit: Total Revenue, Total Costs, and Economic Profit) At zero level of output, total costs are ________ and total revenue is _______ .

Question

Use the following to answer question(s): 
Exhibit: Total Revenue, Total Cost, and Economic Profit
 
-(Exhibit: Total Revenue, Total Costs, and Economic Profit) At zero level of output, total costs are ________ and total revenue is _______ .

Quizplus · Accepted Answer

At zero level of output, a firm may still incur costs such as rent, salaries, and utilities, which are fixed costs and do not vary with the level of output. These are known as total fixed costs. Therefore, total costs are not zero. However, since the firm is not producing anything, it cannot make any sales, so total revenue is zero.

Use the Following to Answer Question(s)