Question

Irrespective of whether a firm produces or shuts down in the short run, fixed cost is equal to its _____

a. average variable cost.
b. total cost.
c. sunk cost.
d. total revenue.
e. marginal cost.

Answer 1

c. sunk cost.

Step-by-step explanation:

Because in short run, fixed cost doesn't changes with output, that is whether we produce or not, we have to pay for it, so it is considered as Sunk cost. Also like Sunk cost, we don't make decisions with fixed costs.