10 years ago, you started a new business and carefully considered the market for your product. You invested in fixed capital and designed your operations under the expectation that the demand for your product would be 5,000 units per month. You are currently operating in the short run producing 6,500 units of output per month as the demand for your product has increased recently. If you have not changed anything about your operations since you began in business and input prices have not changed: a. You must currently be hiring less capital than you need in the long run. b. Your short run total cost is higher than your minimum long run total cost. C. Your average fixed cost has gone down. d. All of the above.

10 years ago, you started a new business and carefully considered the market for your product. You invested in fixed capital and designed your operations under the expectation that the demand for your product would be 5,000 units per month. You are currently operating in the short run producing 6,500 units of output per month as the demand for your product has increased recently. If you have not changed anything about your operations since you began in business and input prices have not changed: a. You must currently be hiring less capital than you need in the long run. b. Your short run total cost is higher than your minimum long run total cost. C. Your average fixed cost has gone down. d. All of the above.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 2P

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