If a firm stays in business, it incurs fixed costs even if it does not produce anything.

a. True

b. False

The answer is true.

A firm stays in business, incurs fixed cost even if it does not produce anything. It will still continue its operation because it will recover its loss at the end of the day as long as you add in its variable cost. If the firm ceased to operate, it will still incur fixed cost such as depreciation.