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:

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, which includes all fees and costs associated with the transaction.

Mortgage Rate

The interest rate charged on a mortgage loan, determined by the lender, which affects the monthly payments and total amount paid over the life of the loan.

Annualized (Geometric)

Refers to a method of converting short-term rates of return into longer-term rates that account for the effect of compounding over a full year.

Rates of Return

The net gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.