When fixed cost doesn’t change with the change in output? I. Marginal cost would be minus. II. Marginal cost would be plus. III. Marginal cost would always be 0.

Correct option is B

The correct option is ✅ (b) Only II. 

• Definition of Marginal Cost (MC): Marginal cost is the change in total cost (or total variable cost) that results from producing one additional unit of output.
• Relationship with Fixed Costs: By definition, fixed costs do not change regardless of the level of output. Because they are constant, they do not contribute to the change in total cost when production increases.
• Variable Cost Influence: Since fixed costs are constant, marginal cost is determined solely by the change in variable costs. Under normal production conditions, producing more units requires more resources (labor, materials), meaning variable costs—and thus marginal cost—will be a positive value (+). 

Why other options are incorrect

• ❌ I. Marginal cost would be minus: A negative marginal cost implies that producing more units actually reduces the total cost, which is not possible in standard economic production models.
• ❌ III. Marginal cost would always be 0: Marginal cost is only zero if an additional unit can be produced with absolutely no additional variable cost (e.g., no extra labor or materials), which is not the case for most goods and services.