Answer the question on the basis of the following cost data for a purely competitive seller: $\begin{array}{ccc}
\begin{array}{c}
&\text { Total } \
\text { Total }&\text { Fixed } \
\text { Output }&\text { Cost }\
\hline
0&\$50\
1 & 50 \
2 & 50 \
3 & 50 \
4 & 50 \
5 & 50 \
6 & 50
\end{array}
\begin{array}{cc}
\text { Total } &\
\text { Variable }&\text { Total } \
\text { Cost }&\text { Cost }\
\hline
\$ 0 & \$ 50 \
70 & 120 \
120 & 170 \
150 & 200 \
220 & 270 \
300 & 350 \
390 & 440
\end{array}
\end{array}$ The data are for:
A) the long run.
B) the short run.
C) both the short run and the long run.
D) the intermediate market period only.

Question

Answer the question on the basis of the following cost data for a purely competitive seller: $\begin{array}{ccc}
\begin{array}{c}
&\text { Total } \
\text { Total }&\text { Fixed } \
\text { Output }&\text { Cost }\
\hline
0&\$50\
1 &   50 \
2 &  50 \
3 &  50 \
4 &  50 \
5 &  50 \
6 &  50
\end{array}
\begin{array}{cc}
\text { Total } &\
\text { Variable }&\text { Total } \
\text { Cost }&\text { Cost }\
\hline
\$ 0 & \$ 50 \
70 & 120 \
120 & 170 \
150 & 200 \
220 & 270 \
300 & 350 \
390 & 440
\end{array}
\end{array}$ The data are for:
A) the long run.
B) the short run.
C) both the short run and the long run.
D) the intermediate market period only.

Quizplus · Accepted Answer

The given cost data provides information for different levels of output with fixed cost and variable cost. The fixed cost remains the same at every level of output and the variable costs change as output increases. This implies that the seller is operating under a fixed plant size in the short run. Hence, the cost data is applicable only in the short run. In the long run, the seller can adjust their plant size and has more flexibility to vary its inputs. Therefore, the cost data will change in the long run.

Answer the Question on the Basis of the Following Cost