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The fixed cost curve is a horizontal straight line to the X axis because
  • a)
    It is impossible to change
  • b)
    IT remains same even if fixed factors change
  • c)
    It remains constant in the long run
  • d)
    It remains constant in the short run
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
The fixed cost curve is a horizontal straight line to the X axis becau...
We know, in the short run, there are some factors which are fixed, while others are variable. Similarly, short run costs are also divided into two kinds of costs:(i) Fixed Cost
The sum total of fixed cost and variable cost is equal to total cost. Let us discuss the short run costs in detail.Units of output are measured along the X-axis and fixed costs along the Y-axis. ... The curve makes an intercept on the Y-axis, which is equal to the fixed cost of Rs. 12. TFC curve is a horizontal straight line parallel to the X-axis because TFC remains same at all levels of output,It remains constant in the short run
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Most Upvoted Answer
The fixed cost curve is a horizontal straight line to the X axis becau...
D is right answer because in short period A firm is unable to change their fixed assets because fixed assets include huge cost .so curve of fixed cost remain unchanged. Horizontal straight line to X-axis.I hope is helpful for you.
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Community Answer
The fixed cost curve is a horizontal straight line to the X axis becau...
Explanation:
In economics, fixed costs are expenses that do not change regardless of the level of production or sales. These costs are incurred by a business regardless of whether it produces any goods or services. Fixed costs include expenses such as rent, salaries, and insurance premiums.

The fixed cost curve represents the relationship between the level of output and the total fixed costs incurred by a firm. It is a horizontal straight line that intersects the x-axis at a certain point.

Reasons for the fixed cost curve being a horizontal straight line:
The fixed cost curve is a horizontal straight line because:

1. It remains constant in the short run: In the short run, a firm cannot easily change its fixed costs. These costs are predetermined and do not vary with the level of output. For example, the rent for a factory remains the same irrespective of the quantity of goods produced. Therefore, the fixed cost curve remains constant in the short run.

2. It remains constant in the long run: In the long run, all costs become variable. However, the fixed cost curve is still represented as a horizontal line because it represents the minimum level of costs that a firm must incur to operate. Even though a firm may have the flexibility to adjust its fixed costs in the long run, it is assumed that it will choose to operate at a level where fixed costs remain constant.

3. It remains the same even if fixed factors change: Fixed costs are associated with fixed factors of production, such as plant and equipment. These factors may change in the long run due to technological advancements or changes in the scale of operations. However, the fixed cost curve remains unchanged because it represents the historical costs incurred by the firm.

4. It is impossible to change: The fixed cost curve is not a horizontal line because it is impossible to change. It is a representation of the costs that a firm incurs regardless of the level of output. However, a firm may be able to reduce its fixed costs in the long run through cost-saving measures or technological advancements.

In conclusion, the fixed cost curve is a horizontal straight line because it represents the constant level of costs that a firm must incur in the short run and long run, regardless of the level of output or changes in fixed factors.
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Direction: Read the following passage and answer the question that follows:The slope of a total revenue curve is particularly important. It equals the change in the vertical axis (total revenu e) divided by the change in the horizontal axis (quantity) between any two points. The slope measures the rate at which total revenue increases as output increases. We can think of it as the increase in total revenue associated with a 1-unit increase in output. The increase in total revenue from a 1-unit increase in quantity is marginal revenue. Thus marginal revenue (MR) equals the slope of the total revenue curve.How much additional revenue does a radish producer gain from selling one more pound of radishes? The answer, of course, is the market price for 1 pound. Marginal revenue equals the market price. Because the market price is not affected by the output choice of a single firm, the marginal revenue the firm gains by producing one more unit is always the market price. The marginal revenue curve shows the relationship between marginal revenue and the quantity a firm produces. For a perfectly competitive firm, the marginal revenue curve is a horizontal line at the market price. If the market price of a pound of radishes is $0.40, then the marginal revenue is $0.40. Marginal revenue curves for prices of $0.20, $0.40, and $0.60. In perfect competition, a firm’s marginal revenue curve is a horizontal line at the market price.Price also equals average revenue, which is total revenue divided by quantity. To obtain average revenue (AR), we divide total revenue by quantity, Q. Because total revenue equals price (P) times quantity (Q), dividing by quantity leaves us with price.Q. The marginal revenue curve shows the relationship between ..................... and ......................

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The fixed cost curve is a horizontal straight line to the X axis becausea)It is impossible to changeb)IT remains same even if fixed factors changec)It remains constant in the long rund)It remains constant in the short runCorrect answer is option 'D'. Can you explain this answer?
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