As a Firm Increases Its Output in the Short Run

question 95

Multiple Choice

As a firm increases its output in the short run,

• A)it also varies its technology
• B)it increases all of its inputs
• C)it increases its plant size
• D)it increases only one of its inputs
• E)at least one of its inputs is fixed

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Definitions:

Marginal Cost

The cost incurred by producing one more unit of a product or service.

TVC

TVC, or Total Variable Cost, encompasses the expenses that change in direct relation to the level of output produced, such as raw materials and labor costs.

TFC

Total Fixed Costs, which are expenses that do not change regardless of the level of production or business activity.

Marginal Cost

Marginal cost is the change in total production cost that arises when the quantity produced is incremented by one unit.