A. variable cost
B. fixed cost
C. total cost
D. marginal cost

Correct Answer:

Option B – fixed cost


A firm that shut down will earn zero revenue and its variable cost of producion is also zero, so the firm’s total cost of production is equal to its fixed cost. However, the firm will still incur fixed cost.

SEE ALSO  The determinants of elasticity include?

Copyright warnings! Do not copy.