Which of the following statements identifies the difference between variable costs and fixed costs?

A) Variable costs are the costs incurred on variable factors of production, whereas fixed costs are the costs incurred on all factors of production.
B) Variable costs of a firm are zero after it shut downs, whereas it continues to incur the fixed costs of production in the short run.
C) Variable costs exist even when the production is zero, whereas fixed costs exist only when there is some positive production.
D) Variable costs are incurred only in the long run, whereas a firm incurs some fixed costs in both the short run and the long run.

B