The Basic Characteristic of the Short Run Is That

question 255

Multiple Choice

The basic characteristic of the short run is that

• A)barriers to entry prevent new firms from entering the industry.
• B)the firm does not have sufficient time to change the size of its plant.
• C)the firm does not have sufficient time to cut its rate of output to zero.
• D)a firm does not have sufficient time to change the amounts of any of the resources it employs.

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Definitions:

Direct Materials Budget

A financial plan that estimates the raw materials needed for production and their expected costs.

Cost per Pound

A measurement of the cost to produce, acquire, or create one pound of a product or material.

Manufacturing Overhead Budget

A financial plan that estimates the costs related to the production process other than direct labor and materials.

Variable Overhead Costs

Costs that fluctuate with production volume, such as utilities or raw materials, and are part of the total overhead costs.