Asked by Genelyn Silva on Jul 28, 2024
Verified
Variable costs equal fixed costs when nothing is produced.
Variable Costs
Costs that change in proportion to the level of activity or volume of production.
Fixed Costs
Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance payments.
- Understand the impact of fixed and variable costs on the cost curves in the short run and long run.
Verified Answer
ZK
Zybrea KnightAug 03, 2024
Final Answer :
False
Explanation :
Variable costs change with the level of production, so if nothing is produced, variable costs would typically be zero, whereas fixed costs remain constant regardless of production levels.
Learning Objectives
- Understand the impact of fixed and variable costs on the cost curves in the short run and long run.