A Firm's Fixed Cost

question 46

Multiple Choice

A firm's fixed cost

• A)does not vary with output.
• B)does not change between the short run and the long run.
• C)is generally a higher percentage of its total cost at high output quantities than at low output quantities.
• D)All of the above are true.

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Definitions:

Binding Price Floor

A price floor set above the equilibrium price, causing a surplus because the quantity supplied exceeds the quantity demanded.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific time frame.

Government Policy

The set of laws, guidelines, regulations, and actions adopted by a government to influence economic or social outcomes within the country.

Price Control

Government-imposed limits on the prices that can be charged for goods and services, typically used to curb inflation or prevent shortages and surpluses.