Figure 5.4
-One can tell that Figure 5.4 shows short run costs because
A) the slope of total costs and variable costs are the same.
B) costs are rising.
C) total costs are positive when output is zero implying fixed costs.
D) all of the above.

Question

Figure 5.4
-One can tell that Figure 5.4 shows short run costs because
A) the slope of total costs and variable costs are the same. 
B) costs are rising. 
C) total costs are positive when output is zero implying fixed costs. 
D) all of the above.

Quizplus · Accepted Answer

Total costs being positive when output is zero implies the presence of fixed costs, which are a characteristic of short-run cost analysis. In the short run, some costs are fixed because not all inputs can be adjusted immediately.

Figure 5.4 -One Can Tell That Figure 5.4 Shows Short Run Costs