When a firm produces less output,it can reduce:

Question

Quizplus · Accepted Answer

When a firm produces less output, it can reduce its variable costs but not its fixed costs. Fixed costs are costs that do not vary with the level of production, such as rent or salaries, and therefore cannot be reduced by producing less output. Variable costs, on the other hand, are costs that vary with the level of production, such as raw materials or labor costs, and can be reduced by producing less output. Therefore, option B is the best choice.

When a Firm Produces Less Output,it Can Reduce