Asked by Taniya Banks on Apr 24, 2024
Verified
In the short run, ________ costs exceed ________ costs.
A) total fixed; total
B) average variable; average total
C) total variable; total
D) average total; average variable
Total Fixed
The sum of all costs that do not change with the level of production or business activity, such as rent or salaries.
Total Variable
The total of all costs that vary with the level of output or production.
- Identify how different costs behave as production levels change in the short run.
Verified Answer
CV
Christopher vincenzo7 days ago
Final Answer :
D
Explanation :
In the short run, average total costs include both average fixed costs and average variable costs. Since average fixed costs are always positive, average total costs must exceed average variable costs.
Learning Objectives
- Identify how different costs behave as production levels change in the short run.