The correct answer is: C. TFC
A firm’s total fixed cost (TFC) is the sum of all costs that do not vary with the level of output. These costs are incurred even if the firm produces nothing, so they will be incurred even if the firm shuts down temporarily.
Average fixed cost (AFC) is TFC divided by output. Since TFC does not change with output, AFC declines as output increases.
Average variable cost (AVC) is variable cost divided by output. Variable costs are costs that vary with the level of output. These costs are not incurred if the firm produces nothing, so they will be zero if the firm shuts down temporarily.
Total variable cost (TVC) is the sum of all variable costs. It is equal to output times AVC.
Therefore, if a firm shuts down temporarily, it will incur a loss equal to its total fixed cost.