If a firm mothballs a factory so that its output is zero, which of the following costs will also be zero?
A)variable cost
B)total cost
C)average cost
D)all of the above

Question

Quizplus · Accepted Answer

When a firm mothballs a factory, its output drops to zero, and as a result, its variable costs (costs that vary with the level of output, such as raw materials and labor) also drop to zero. Fixed costs, however, such as rent or salaries for essential staff, may still be incurred even if the factory is not producing anything.

If a Firm Mothballs a Factory So That Its Output