Whitewater Rapids provides canoes to tourists eager to ride Whitewater river's rapids. Management has determined that there is o
ne chance in a thousand of a customer being injured or killed. Settlement of resulting lawsuits has an average cost of $850,000. Insurance with a $100,000 deductible is available. It covers the costs of lawsuits, unless there is evidence of criminal negligence. What is the expected loss without insurance?
The short-run is an imaginary short period in which all the inputs cannot be varied. There is at least one input that cannot be varied. So in the short run, there are some fixed inputs and some variable inputs.
The cost incurred on fixed inputs are fixed costs and that incurred on variable inputs are variable costs. So there are fixed costs and variable costs in the short run.
In the long run, all inputs are variable so all costs are variable as well.
The supermarket use lobby to congresspeople to push for legislation on the subject in their behalf and against Quick Market Inc desires of eliminating the supply chain and selling directly to the final consumer.
Though legislation they will make it illegal or try to increase the burocratic cost with permits and form needed to autorize retail sale.