In the Short Run

question 316

Multiple Choice

In the short run

• A) all factors of production are fixed.
• B) at least one factor of production is fixed.
• C) all factors of production are variable.
• D) there are no variable costs.

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Definitions:

Explicit Costs

Direct, out-of-pocket payments for costs of production, such as wages, rent, and materials, that a company incurs in conducting its business.

Implicit Costs

Costs that represent the opportunity cost of using resources that a business already owns, rather than explicit outlays of cash.

Total Revenue

The total amount of money received by a company from selling goods or services before any expenses are subtracted.

Explicit Costs

Direct, out-of-pocket payments for resources or services used in the production of goods or services.