The table given below shows the total fixed and variable costs of a firm. Table 7.3

- If the firm described in Table 7.3 decides to produce nothing,which of the following would be true?
A)Total cost will become zero.
B)Total variable cost will become $30.
C)Total cost will equal $40.
D)Average total cost will equal zero.
E)Marginal cost will equal $10.

Question

The table given below shows the total fixed and variable costs of a firm. Table 7.3

- If the firm described in Table 7.3 decides to produce nothing,which of the following would be true?
A)Total cost will become zero. 
B)Total variable cost will become $30. 
C)Total cost will equal $40. 
D)Average total cost will equal zero. 
E)Marginal cost will equal $10.

Quizplus · Accepted Answer

When a firm produces nothing, it still incurs fixed costs, so the total cost equals the fixed cost, which is $40.

The Table Given Below Shows the Total Fixed and Variable