Short-Run Costs Are Never Equal or Lower Than Long-Run Cost

question 3

True/False

Short-run costs are never equal or lower than long-run cost.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Factory Overhead

Costs associated with operating a factory that are not directly tied to a specific product, including maintenance, utilities, and salaries of supervisors.

Factory

A building or group of buildings where goods are manufactured or assembled primarily by machines.

Factory Rent

The cost incurred for leasing a facility used in the manufacturing process.