A fixed cost is
A)the cost of any input with a fixed price per unit.
B)a cost which increases in a fixed proportion as output increases.
C)a cost the firm must pay even if output is zero.
D)both b and c
E)all of the above

Question

Quizplus · Accepted Answer

A fixed cost is a cost that remains constant, regardless of the level of output. This means that the firm must pay this cost even if it produces zero units. Options A and B describe variable costs, which change with the level of output. Therefore, option C is the correct choice.

A Fixed Cost Is