During the course of a week, McDonald's has enough time to hire or layoff workers, but it does not have enough time to expand its kitchen or add an additional seating area. In this situation, McDonald's:
A) has no fixed costs.
B) is in the short run.
C) suffers an economic loss.
D) earns a large profit.

Question

Quizplus · Accepted Answer

McDonald's is in the short run because it has limited ability to adjust its fixed factors of production, such as its physical facilities. It can adjust its variable factors of production, such as labor, in the short run.

During the Course of a Week, McDonald's Has Enough Time