If a firm produces nothing,then its:
A) variable costs equal zero.
B) fixed costs equal zero.
C) total costs equal zero.
D) All of these are true.

Question

Quizplus · Accepted Answer

Variable costs are costs that vary with the level of output. If a firm produces nothing, its variable costs are zero. Fixed costs, however, remain constant regardless of output, so they are not zero. Total costs include both fixed and variable costs, so they are not zero either.

If a Firm Produces Nothing,then Its