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?

Question

Answer

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

Answer

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.

Answer

Option D

Answer

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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