A short-run cost function assumes that
A)the level of output is fixed.
B)at least one input is fixed in supply.
C)all inputs are fixed in supply.
D)both a and b
E)both b and c

Question

Quizplus · Accepted Answer

A short-run cost function assumes that at least one input is fixed in supply while other inputs vary. Therefore, the correct choice is B, which implies that in the short run, there is at least one input that cannot be changed, and the cost of producing more output will increase due to the fixed input.

A Short-Run Cost Function Assumes That