Question

When a firm stops production temporarily it's fixed cost is (i) Zero or (ii) Remains the same?

Answer 1

answer is it's remains the same

Answer 2

Answer:

When a firm stops production temporarily it's fixed cost is (ii) Remains the same.

Explanation:

• A firm when shuts down on a certain period of time, temporarily incurs losses generally. Since, the firm has fulfilled the costs of fixed dues, fixed cost remains same on that temporary period of time.
• A question thus keep erupting in this case that whether the company must regain its productivity after that temporary short leave or shut itself down completely.

Hence, when a firm stops production temporarily it's fixed cost is (ii) Remains the same.