At Which Point Is Society Producing Some of Each Type

question 104

Multiple Choice

At which point is society producing some of each type of structure but still producing inefficiently? (See Figure 1.1.)

• A)A
• B)B.
• C)C.
• D)D.

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Definitions:

Short Run

A period in which at least one input, such as plant size or the number of firms in the market, is fixed and cannot be changed.

Fixed Cost

Any cost that does not depend on the firms’ level of output. These costs are incurred even if the firm is producing nothing. There are no fixed costs in the long run.

Marginal Costs

Marginal Costs involve the additional expenses incurred from the production of one extra unit of a product or service.

Total Variable Cost

the sum of all costs that vary with the level of production, such as materials and labor directly involved in manufacturing.