In the Short Run, a Firm Cannot Change the Amount

question 78

Multiple Choice

In the short run, a firm cannot change the amount of capital it uses. Therefore the cost of capital is a

• A) variable cost.
• B) marginal cost.
• C) fixed cost.
• D) productivity cost.
• E) short-run cost.

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Definitions:

Credits

Accounting entries that represent an increase in liabilities or revenues, or a decrease in assets or expenses.

Adjusting Entries

Adjusting entries are journal entries made in an accounting period's end to allocate income and expenditures to the period in which they actually occurred.

Chart of Accounts

A structured list detailing a company's financial accounts, categorized to facilitate the organization and reporting of financial transactions.

Accounting Period

A specific time frame in which financial activities are recorded and reported, commonly a year or a quarter.