In the short run, all firms __________.

Question

face substantial variable costs if no output is produced

have costs that they must bear regardless of their output levels

do not have costs that they must bear regardless of their output levels

do not have to pay fixed costs if there is no output produced

Answer 1

In the short run, all firms have costs that they must bear regardless of their output levels.

This statement is true because in the short run, firms incur fixed costs (such as rent, salaries, etc.) that remain constant regardless of the level of output produced. Variable costs, on the other hand, vary with the level of production but are not incurred if the firm produces no output.