Asked by
Preeti Singh
on Dec 11, 2024Verified
A fruit packing plant usually shuts down for three months each year. During that period, what happens to its costs?
A) Its fixed costs are greater than zero.
B) Its variable costs are greater than zero.
C) Its total costs are zero.
D) Its fixed costs are zero.
Fixed Costs
Expenses that do not change with the volume of output, such as rent, salaries, and insurance premiums.
Variable Costs
Expenses that vary directly with the amount of production output.
Total Costs
Total costs encompass the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.
- Develop an understanding of the concepts of variable and fixed costs and how they contribute to the overall cost.
- Understand the concept of the short run in production and its implications for cost structures.
Verified Answer
KP
Learning Objectives
- Develop an understanding of the concepts of variable and fixed costs and how they contribute to the overall cost.
- Understand the concept of the short run in production and its implications for cost structures.