In the Short Run,when Are a Firm's Fixed Costs Equal

question 96

Multiple Choice

In the short run,when are a firm's fixed costs equal to zero

• A)if it incurs no variable costs
• B)if it produces no output
• C)if it incurs profits
• D)fixed costs are always greater than zero

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Definitions:

Industry Price

The general cost at which goods or services are sold within a particular industry, influenced by supply, demand, and competition.

Marginal Cost

The added expense required to produce one more unit of a product or service.

Fixed Cost

An expense that remains constant regardless of the volume of products or services manufactured or distributed.

Monopoly Profits

The excess profits earned by a monopoly as a result of its ability to set price above marginal costs due to lack of competition.