A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period
A)are long-run decisions.
B)are short-run decisions.
C)involve only maintenance of the factory.
D)are zero because the cost decisions were made at the beginning of the business.

Question

Quizplus · Accepted Answer

Short-run decisions involve the period during which at least one factor of production is fixed, such as the factory in this case. The company will make short-run decisions regarding variable costs while operating within the fixed capacity of the factory.

A Local Playground Equipment Company Plans to Operate Out of Its