ECONOMICS

Detailed explanation-1: -Fixed cost is constant at every level of output except zero. When a firm produces no output, fixed costs are zero in the short run.

Detailed explanation-2: -The negative aspect of fixed costs (also called continuing or ongoing costs) is: even if the firm produces nothing-e.g. because it is closed temporarily – the fixed costs have to be paid. Variable costs will change immediately when a company produces more, less, or nothing at all.

Detailed explanation-3: -In the short run, total cost is equal to zero when output is equal to zero.

Detailed explanation-4: -Total fixed cost (TFC) is that cost which does not change with a change in the level of output. Total variable cost (TVC) is that cost which changes as the level of output changes. Total cost (TC) is the sum of total fixed cost and total variable fixed cost.

Detailed explanation-5: -The correct answer is d. Therefore, if the firm produces no output, the variable cost incurred becomes zero.