The results of many empirical studies of short-run cost functions have shown that total costs conform to
A)a quadratic total cost function.
B)a power cost function.
C)a linear cost function.
D)a cubic cost function.

Question

Quizplus · Accepted Answer

Empirical studies have shown that in the short run, total costs conform to a linear cost function. This means that if one input is increased, total costs will increase in a linear fashion. Additionally, if fixed costs are added to the equation, the total cost function will become a step function.

The Results of Many Empirical Studies of Short-Run Cost Functions