What happens when a business is operating a factory in the short run?
A)The business cannot alter variable costs.
B)Total cost and variable cost are usually the same.
C)Average fixed cost rises as output increases.
D)The business cannot adjust the quantity of fixed inputs.

Question

Quizplus · Accepted Answer

In the short run, a business is operating with at least one fixed input, such as a factory building or equipment, that it cannot easily adjust. This means that the quantity of fixed inputs cannot be changed, but the business may be able to adjust its variable inputs, such as labor or materials, to produce different levels of output. Therefore, D is the best choice as it accurately reflects the concept of fixed inputs in the short run.

What Happens When a Business Is Operating a Factory in the Short