Sam's surf shop has total costs of $2,000 when it is not producing any surfboards.This means that
A)Variable costs are $2000.
B)Fixed costs are $2,000.
C)The shop is very inefficient in its production.
D)Fixed costs are zero.

Question

Quizplus · Accepted Answer

The fact that the total costs are $2,000 when no surfboards are produced indicates that there are fixed costs involved in running the surf shop, which include expenses such as rent, utilities, and salaries. Therefore, choice B is correct.

Sam's Surf Shop Has Total Costs of $2,000 When It