Answer: d.total cost line begins at the total fixed cost value on the vertical axis
Explanation:
The Total Cost is the combination of both variable and fixed costs.
Variable costs are dependant on the level of production but fixed costs are not. This means that even if the company is not producing anything, they will still incur fixed costs.
That would mean that Total Costs is not at zero in the beginning but rather at whatever level of fixed costs the company is at.
This is why the Total Cost curve does not begin at zero but rather at the Fixed cost value.
I have attached a graph to explain further.
Notice that the Total Cost line began at $20,000 because that was the Fixed Cost even though Sales had started at 0.
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