Asked by Clayton Scheutzow on Jun 15, 2024

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When a factory is operating in the short run,

A) it cannot alter variable costs.
B) total cost and variable cost are usually the same.
C) average fixed cost rises as output increases.
D) it cannot adjust the quantity of fixed inputs.

Short Run

A period in economics during which at least one input, such as plant size or capital, is fixed and cannot be changed.

Variable Costs

Variable costs are expenses that change in proportion to the activity or volume of business, such as materials and labor costs.

Fixed Inputs

Resources used in production that cannot be easily increased or decreased in a short period.

  • Develop an understanding of the relationship between short-term production inputs and their associated costs.
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JH
jasmine harrisJun 18, 2024
Final Answer :
D
Explanation :
In the short run, a factory cannot adjust the quantity of fixed inputs, such as buildings and heavy machinery, because these are commitments that cannot be easily or quickly changed. Variable costs, on the other hand, can be adjusted in the short run, and average fixed cost actually decreases as output increases due to the spreading effect.