Which of the following "costs" could a firm that wants to remain in business avoid if it halted current production?
A) Fixed costs
B) Variable costs
C) Sunk costs
D) Opportunity costs

Question

Quizplus · Accepted Answer

A firm can avoid variable costs if it halts current production. Variable costs are expenses that vary with the level of production, such as raw materials and labor costs. By stopping production, the firm can avoid incurring these costs. However, fixed costs, sunk costs, and opportunity costs would still need to be paid regardless of whether or not production ceased.

Which of the Following "Costs" Could a Firm That Wants