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| 1. |
An economiat claims that if cost is zero, production is also zero but if production is zero, the cost may not be zero. Defend or refute his claim. |
| Answer» Solution :I defend his claim as when COST of PRODUCTION is not incurred production cannot take place and on the other hand, when production is zero, some fixed costs MUST have been incurred by the producerr like rent of the BUILDING minimum electricity bill, minimum telephone bill etc. i.e., even if total variable cost is zero, fixed cost remain POSITIVE. | |