When a Factory Is Operating in the Short Run

question 191

Multiple Choice

When a factory is operating in the short run:

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

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Definitions:

Common Stockholders' Equity

Common stockholders' equity represents the ownership interest held by common shareholders in a company, including assets minus liabilities and preferred stock equity.

Market Value

The ongoing rate at which an asset or service can be traded or acquired in the market.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares.