Which best characterizes the short-run cost structure of the railroads?
A) low variable costs, high direct separable costs
B) low fixed costs, low variable costs
C) low joint costs, high separable costs
D) large proportion of indirect fixed costs

Question

Quizplus · Accepted Answer

Railroads have a large proportion of indirect fixed costs, such as infrastructure maintenance and administrative expenses, which do not vary significantly with the amount of goods transported or the distance over which they are transported.

Which Best Characterizes the Short-Run Cost Structure of the Railroads