In the Short Run, a Firm Incurs Fixed Costs

question 233

Multiple Choice

In the short run, a firm incurs fixed costs

• A)only if it incurs variable costs.
• B)only if it produces no output.
• C)only if it produces a positive quantity of output.
• D)whether it produces output or not.

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Definitions:

Credit Sales

Sales transactions where the payment is deferred to a future date, as opposed to cash sales where payment is made immediately.

Raw Materials

The basic materials and substances used in the initial stages of production before being transformed into final products.

Direct Labor Cost

The total cost of wages for labor directly involved in the production of goods or services.

Direct Labor Wage Rate

The rate of pay for workers who are directly involved in the production of goods or the provision of services.