Asked by AIDAN ECCLESTON on Jul 13, 2024
Verified
Refer to Figure 13-3. Why doesn't the total cost curve begin at the origin (the point 0,0) ?
A) Because variable costs are positive when output is zero
B) Because fixed costs are positive when output is zero
C) Because the firm is producing at the efficient scale
D) Because the firm is maximizing profits
Total Cost Curve
A graphical representation of the total cost of production at various levels of output, showing the relationship between cost and quantity produced.
Origin
The point at which something begins or arises, often used in various contexts such as the origins of a concept, product, or phenomenon.
Fixed Costs
Expenses that do not change with the level of production or sales, such as rent, salaries, or insurance premiums.
- Comprehend how fixed costs influence the average total cost and their variation with changes in production quantities.
Verified Answer
CS
Carley ShererJul 19, 2024
Final Answer :
B
Explanation :
The total cost curve does not begin at the origin because even when output is zero, the firm incurs fixed costs. Fixed costs are expenses that do not change with the level of output, such as rent, salaries, and insurance.
Learning Objectives
- Comprehend how fixed costs influence the average total cost and their variation with changes in production quantities.