ECONOMICS

Detailed explanation-1: -Fixed costs are always shown as the vertical intercept of the total cost curve; they are the costs incurred when output is zero, so there are no variable costs. You can see in the graph that once production starts, total costs and variable costs rise.

Detailed explanation-2: -When the output is zero, only the variable cost will reduce to zero. The fixed cost will remain the same. Hence, the total cost will be equal to the fixed cost.

Detailed explanation-3: -When the output is equal to zero, the variable cost is zero. Variable costs are those that depend on the level of output. The fixed costs are those that are present even when production is zero, and therefore the variable cost is zero when output is zero.

Detailed explanation-4: -In some cases, businesses only list their total costs and variable costs per unit. You can use this information to determine your fixed costs with the formula: Fixed Cost = Total Cost – (Variable Cost Per Unit * Units Produced).