In the short run, a firm incurs fixed costs
A)only if it incurs variable costs.
B)only if it produces no output.
C)only if it produces a positive quantity of output.
D)whether it produces output or not.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not change with the level of output produced. They are incurred whether or not a firm produces any output. Examples of fixed costs include rent, property taxes, and salaries of staff. Therefore, they are incurred regardless of whether the firm produces output or not.

In the Short Run, a Firm Incurs Fixed Costs