Question

Which of the following options is true about total fixed cost curve?

Options

• Parallel to X-axis

• Parallel to Y-axis

• Positively sloping

• Negatively sloping

Answer 1

Parallel to X-axis

Explanation:

Total Fixed Cost (TFC) refers to the expenses that a firm must pay regardless of its level of production (such as rent or permanent salaries). Because this cost remains completely constant whether output is zero or very high, plotting it against output on a graph yields a flat, horizontal straight line parallel to the X-axis.