If a firm decides to produce no output in the short run, its costs will be
A)its marginal costs.
B)its variable costs.
C)its fixed costs.
D)zero.

Question

Quizplus · Accepted Answer

In the short run, if a firm decides to produce no output, it will still incur its fixed costs. Fixed costs are expenses that do not change with the level of output, such as rent, salaries, and insurance. Variable costs, which vary with output, and marginal costs, the cost of producing one more unit of a good, would be zero if no output is produced.

If a Firm Decides to Produce No Output in the Short