Which of the following is the best definition of fixed costs? The costs associat
ID: 2443009 • Letter: W
Question
Which of the following is the best definition of fixed costs?
The costs associated with capital input.
The long-run total costs paid by an operating firm.
The short-run costs paid for labor input.
The short-run total costs paid by a shutting-down firm.
A monopoly’s _______ changes with the shift of demand curve, when all the other factors remain.
total cost (TC) curve
marginal cost (MC) curve
average cost (AC) curve
marginal revenue (MR) curve
The costs associated with capital input.
The long-run total costs paid by an operating firm.
The short-run costs paid for labor input.
The short-run total costs paid by a shutting-down firm.
A monopoly’s _______ changes with the shift of demand curve, when all the other factors remain.
total cost (TC) curve
marginal cost (MC) curve
average cost (AC) curve
marginal revenue (MR) curve
Explanation / Answer
1.
Fixed cost can be defined as the cost which does not change with the change in the unit of output in the short-run. It will exists even if the firm shuts down its production because it does not depends on the production level in the short-run.
Hence fixed cost can be best decribed by the short-run total cost paid by the shutting down firm.
Hence option fourth is the correct answer.
2.
Since the monopoly Marginal revenue curve is below the demand curve because for selling more, the monopolist has to reduce the price. So with the shift of the demand curve, the marginal revenue curve changes when all factors remains same.
Hence it can be said that a monopoly’s Marginal revenue (MR) curve changes with the shift of demand curve, when all the other factors remain.
Hence option fourth is the correct answer.
option fourth;marginal revenue (MR) curve
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.