Label Whether Each of the Following Costs Is Most Likely

question 7

Essay

Label whether each of the following costs is most likely fixed (F) or variable (V).

---

Definitions:

Short Run

The short run is a period in which at least one factor of production is fixed, limiting the ability of a business to expand or reduce its output.

Shut Down

A temporary choice made by a company to halt manufacturing because of unsuitable market circumstances.

Shutdown Point

The level of production and price at which the revenue of a firm covers its variable costs, below which the firm would cease operations.

Optimal Output

The level of production at which a firm achieves the highest possible profit, given its cost structure and the market price.