When a Factory Is Operating in the Short Run

question 198

Multiple Choice

When a factory is operating in the short run,

• A)it cannot alter variable costs.
• B)total cost and variable cost are usually the same.
• C)average fixed cost rises as output increases.
• D)it cannot adjust the quantity of fixed inputs.

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Definitions:

Additional Benefits

The perks or supplementary advantages that come in addition to the primary benefits of a product, service, or policy.

Marginal Analysis

Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Relevant Costs

Only those costs that will be affected by a decision or action and therefore should be considered in decision-making.

Activity

In economic terms, refers to actions or engagements, such as production or consumption, within an economy.