2. When you started in business 10 years ago, you bought machinery and designed expectation that the demand for your product would be 1000 units per month. You are currently operating in the short run producing 2,500 units of output per month as some competitors have shut down operations and your customer base has grown. 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 more capital than you need in the long run. b. You must currently be hiring more labor than you need in the long run. c. Your short run total cost is higher than your minimum long run total cost. d. Your average fixed cost has gone up.

2. When you started in business 10 years ago, you bought machinery and designed expectation that the demand for your product would be 1000 units per month. You are currently operating in the short run producing 2,500 units of output per month as some competitors have shut down operations and your customer base has grown. 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 more capital than you need in the long run. b. You must currently be hiring more labor than you need in the long run. c. Your short run total cost is higher than your minimum long run total cost. d. Your average fixed cost has gone up.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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