The Total Cost to the Firm of Producing Zero Units

question 156

Multiple Choice

The total cost to the firm of producing zero units of output is

• A)zero in both the short run and the long run.
• B)its fixed cost in the short run and zero in the long run.
• C)its fixed cost in both the short run and the long run.
• D)its variable cost in both the short run and the long run.

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Definitions:

Profit Rate

The ratio of profits generated to the amount of capital or resources invested, indicating the efficiency of an investment or business operation.

Inventory

The goods or materials a business holds for the ultimate purpose of resale or processing in the production process.

Invest

Putting money into ventures with the expectation of receiving a financial return or profit.

Investment Project

A project involving the allocation of capital or resources towards an initiative expected to generate future income or profit over a certain period of time.