Q164
TC curve
A.
Starts from origin
B.
Does not start from origin
AnswerC.
Is parallel to Y-axis
D.
None of the above
Answer: Option B
Solution
Answer: Option B
Solution:
TC curve does not start from origin. The shape of the total cost curve is based on short-run production returns, especially the law of diminishing marginal returns. Another observation is that the total cost curve does not go through the origin, but rather begins at a positive value on the vertical axis. This vertical intercept indicates fixed cost.