Given the following graphs, which graph represents fixed costs?
A) I
B) II
C) III
D) none of these

Question

Given the following graphs, which graph represents fixed costs?    
A) I 
B) II 
C) III 
D) none of these

Quizplus · Accepted Answer

Fixed cost is a cost that remains constant regardless of the level of output or sales. In graph II, the y-axis intercept (where the line crosses the y-axis) represents the fixed cost as it remains constant regardless of the level of output on the x-axis. In graphs I, III, and IV, the y-axis intercept does not represent a fixed cost as the lines decrease as the level of output increases.

Given the Following Graphs, Which Graph Represents Fixed Costs