In the short run, the firm's total cost equals
A) the total fixed costs + the total variable costs.
B) the average fixed costs + average variable costs.
C) the average fixed cost + the marginal cost.
D) the total variable costs only.

Question

Quizplus · Accepted Answer

In the short run, the firm's total cost will include both fixed costs (which cannot be adjusted) and variable costs (which can be adjusted in response to changes in output). Therefore, Option A is correct as it includes both fixed and variable costs in the total cost calculation. Options B and C are incorrect because they only include either average fixed costs or marginal cost, respectively, and not both fixed and variable costs. Option D is incorrect because it only includes variable costs and not fixed costs.

In the Short Run, the Firm's Total Cost Equals