In Perfect Competition, a Change in Fixed Cost

question 147

Multiple Choice

In perfect competition, a change in fixed cost:

• A) will have no effect on price in the short run.
• B) will have no effect on output in the short run.
• C) will induce entry or exit in the long run so that price will change enough to leave firms earning zero profits.
• D) is described by all of the above.

---

Definitions:

Cost Ledger

A subsidiary ledger that records the individual costs of production, providing detailed cost information.

Period Cost

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred, such as selling and administrative costs.

Factory Lunchroom

An area within a manufacturing facility allocated for employee meals and breaks.

Receiving Report

A document used to confirm the receipt of goods delivered, detailing the quantity and condition of the items.