Question

When a factory is operating in the short run? a. average fixed cost rises as output increases. b. it cannot alter variable costs. c. total cost and variable cost are usually the same.\

Answer 1

No Variable costs occurs in the short run.

The average fixed cost of the production remains same till the output is produced and as the output increases or becomes to rise slowly.

It cannot alter the variable costs but can manage the total cost and variable cost by managing the marginal cost rest remaining the same.

The total expenses consist of the variable and marginal cost and fixed costs which are both short term and long term investments.

It cannot alter any other cost except these cost because they are attached with cost of production.

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