The gradient of the Total Fixed cost curve isGroup of answer choicesequal to zerogreater than 1is undefinedis greater than zero but less than 1
Question
The gradient of the Total Fixed cost curve is
- equal to zero
- greater than 1
- undefined
- is greater than zero but less than 1
Solution
The gradient of the Total Fixed Cost curve is equal to zero.
Here's why:
Total Fixed Cost (TFC) is the cost that a firm must pay regardless of its level of output. These costs are fixed because they do not change with the quantity of output produced. Examples include rent, salaries, and insurance.
When you plot TFC on a graph with quantity on the x-axis and cost on the y-axis, the TFC curve is a horizontal line. This is because, as mentioned, TFC does not change with the quantity of output.
The gradient (or slope) of a line is a measure of how steep the line is. For a horizontal line, the gradient is zero because the line is not steep at all - it's flat.
Therefore, the gradient of the Total Fixed Cost curve is equal to zero.
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