Figure 11-7

Figure 11-7 shows the cost structure for a firm.
-Refer to Figure 11-7.If output is 100 units what is the fixed cost of production?
A)$8
B)$800
C)$1,000
D)This cannot be determined from the diagram.

Question

Figure 11-7
  
Figure 11-7 shows the cost structure for a firm.
-Refer to Figure 11-7.If output is 100 units what is the fixed cost of production?
A)$8 
B)$800 
C)$1,000 
D)This cannot be determined from the diagram.

Quizplus · Accepted Answer

Fixed cost is the cost that remains constant regardless of the level of production. In the given figure, fixed cost is represented by the horizontal distance between the origin and the vertical axis labeled FC. At an output of 100 units, the fixed cost is $800. Therefore, the correct choice is B.

Figure 11-7 Figure 11-7 Shows the Cost Structure for a Firm