If a firm stops production,then its:
A)variable costs drop to zero.
B)fixed costs rise.
C)total costs may increase or decrease.
D)All of these are true.

Question

Quizplus · Accepted Answer

When a firm stops production, its variable costs drop to zero since there are no longer any costs associated with producing goods or services. Fixed costs may remain the same, so there is no guarantee that they will rise. Total costs will likely decrease due to the elimination of variable costs. Therefore, only choice A is true.

If a Firm Stops Production,then Its