Which of These Assumptions Is Often Realistic for a Firm

question 261

Multiple Choice

Which of these assumptions is often realistic for a firm in the short run?

• A)The firm can vary both the size of its factory and the number of workers it employs.
• B)The firm can vary the size of its factory but not the number of workers it employs.
• C)The firm can vary the number of workers it employs but not the size of its factory.
• D)The firm can vary neither the size of its factory nor the number of workers it employs.

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Definitions:

Accounting Profits

The net income for a company calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Economic Profits

The gap between a company's overall income and its combined explicit and implicit expenses.

Sales

Transactions involving the exchange of goods or services for money.

Explicit Costs

Direct, out-of-pocket payments for resources employed in the production of goods or services, such as wages, rent, and materials.