Cindy's Nails operates in the perfectly competitive pedicure industry.The city is considering requiring nail salons to be certified by a health inspector.The certification will cost $1,000 annually and is thus a fixed cost.The certification will affect Cindy's decision to operate in the long run but will not affect the number of pedicures she chooses to perform in the short run.

Question

Quizplus · Accepted Answer

In the short run, Cindy's decision to continue operating and the number of pedicures she chooses to perform will not be affected by the certification cost. However, in the long run, the certification cost will become a fixed cost and may impact Cindy's decision to continue operating in the industry.

Cindy's Nails Operates in the Perfectly Competitive Pedicure Industry