Question

The shape of total fixed cost curve is

• A. U-shaped
• B. Downward sloping
• C. Inversely S-shaped
• D. Horizontal straight line parallel to x-axis

Hint:

Fixed costs remain constant regardless of the output level, which is why their curve is a horizontal straight line.

Answer 1

The Correct Option is D

Step 1: Understanding Fixed Costs:
Fixed costs are costs that do not change with the level of production or output. These costs remain constant even when output is zero, and they are incurred regardless of the production level.
Step 2: Analyzing the Fixed Cost Curve:
The total fixed cost (TFC) curve is a straight line parallel to the x-axis, as it does not change with variations in output. This means that whether the output is zero or increases, the total fixed costs remain the same.
Step 3: Conclusion:
The correct answer is option (D), as the total fixed cost curve is horizontal and does not change with output.