In the short run, the price that the firm receives must cover its average ___________ cost, but not necessarily its average ___________ cost.

Question

Quizplus · Accepted Answer

In the short run, the firm should cover its variable cost, as those costs are directly related to producing the goods or services. The fixed cost cannot be immediately adjusted in the short run, so they are not necessarily covered in the short run. Therefore, the answer is A) variable cost, total cost.

In the Short Run, the Price That the Firm Receives