Question

Variable costs equal fixed costs when nothing is produced, while average total costs equals average fixed...

Variable costs equal fixed costs when nothing is produced, while average total costs equals average fixed costs when nothing is produced.



which one:

True

False

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Homework Answers

Answer #1

False.

When nothing is produced the variable cost is zero while the fixed cost remains same for production or no production.

When nothing is produced the fixed cost is equal to the total cost as total cost equals to fixed cost plus variable cost and the variable cost is zero when nothing is produced. Thus, at that situation the average fixed cost is also equals to the average total cost.

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