When a Factory Is Operating in the Short Run

question 198

Multiple Choice

When a factory is operating in the short run,

• A)it cannot alter variable costs.
• B)total cost and variable cost are usually the same.
• C)average fixed cost rises as output increases.
• D)it cannot adjust the quantity of fixed inputs.

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Definitions:

Money Market

A section of the financial market where short-term financial assets with high liquidity are traded, such as treasury bills and commercial paper.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Surplus of Money

Situation where the supply of money in an economy exceeds the demand for it, often leading to lower interest rates and inflation.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed on an annual basis.