Suppose you are planning to open your own salon. Which statement is TRUE?
A)Workers are a variable cost.
B)The building housing the salon is a variable cost in the short run.
C)Shampoo and other hair care products are a fixed cost in the short run.
D)Validation of parking is a fixed cost in the long run.

Question

Quizplus · Accepted Answer

Workers are a variable cost because the number of employees can be adjusted depending on the level of business activity. As business grows, more workers can be hired, and as activity slows down, some workers may need to be laid off. The building housing the salon is a fixed cost in the short run because it cannot be easily adjusted in the short term. Shampoo and other hair care products are variable costs in the short run because the quantity used can be adjusted depending on the level of business activity. Validation of parking is a fixed cost in the long run because it is a recurring expense that cannot be easily changed in the long term.

Suppose You Are Planning to Open Your Own Salon