Exhibit 7-5

-In Exhibit 7-5, what is variable cost when no output is being produced?
A) $0
B) $10
C) infinity
D) it is impossible to calculate variable cost unless we know the daily wage
E) it is impossible to calculate variable cost unless we know fixed cost at Q = 0

Question

Exhibit 7-5
 
-In Exhibit 7-5, what is variable cost when no output is being produced?
A) $0 
B) $10 
C) infinity 
D) it is impossible to calculate variable cost unless we know the daily wage 
E) it is impossible to calculate variable cost unless we know fixed cost at Q = 0

Quizplus · Accepted Answer

When no output is being produced, there are no variable costs incurred. Therefore, the variable cost is $0.

Exhibit 7-5 -In Exhibit 7-5, What Is Variable Cost When No Output