In the Short-Run,when Output Is Zero

question 126

Multiple Choice

In the short-run,when output is zero,

• A)fixed cost is zero.
• B)variable cost is zero.
• C)total cost is zero.
• D)All of the choices are correct.

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Definitions:

Debt-to-Assets Ratio

A leverage ratio that calculates the total amount of debt relative to the total amount of assets, indicating how much of the company's assets are funded by debt.

Cost of Equity

The rate of return that a company theoretically pays to its equity investors to compensate for the risk they undertake by investing in the company.

Cost of Equity

The return that investors expect for investing in a company's equity, considered the cost of equity capital.

Security Market Line

A representation in financial models that shows the relationship between the risk of an investment and its expected return.