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Which of the following statement is true?
Fixed cost curve is parallel to X-axis because it changes at all levels of output.
Fixed cost curve is parallel to Y-axis because it remains constant at all levels of output.
Fixed cost curve is parallel to X-axis because it remains constant at all levels of output.
Fixed cost curve is parallel to Y-axis because it changes at all levels of output.
Option (3) is correct. Explanation: Fixed cost curve is parallel to x-axis because it remains constant at all levels of output. Hence, fixed cost is the cost incurred on fixed factors of production like land and machinery.
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