The table given below shows the total fixed and variable costs of a firm.Table 8.3

-If the firm described in Table 8.3 decides to produce nothing, its:
A)total cost will fall to zero.
B)total variable cost will be equal to $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 8.3
 
-If the firm described in Table 8.3 decides to produce nothing, its:
A)total cost will fall to zero. 
B)total variable cost will be equal to $30. 
C)total cost will equal $40. 
D)average total cost will equal zero. 
E)marginal cost will equal $10.

Quizplus · Accepted Answer

If the firm decides to produce nothing, its total cost will equal its fixed costs, which do not vary with the level of production. Since variable costs are zero when production is zero, the total cost will be equal to the fixed costs, which is $40 in this scenario.

The Table Given Below Shows the Total Fixed and Variable