Figure 6.7 Figure 6.7 shows the cost structure for a firm.
-Refer to Figure 6.7.If output is 100 units,fixed cost of production is ________.

Question

Figure 6.7  Figure 6.7 shows the cost structure for a firm.
-Refer to Figure 6.7.If output is 100 units,fixed cost of production is ________.

Quizplus · Accepted Answer

The fixed cost of production is the portion of the total cost that remains constant regardless of the level of output. In Figure 6.7, the fixed cost is indicated as a horizontal line, which intersects the y-axis at the point $800. This means that even if the firm produces 0 units, it still has to incur $800 in fixed costs. Therefore, if the firm produces 100 units, its fixed cost of production would still be $800.

Figure 67 Figure 6