Fixed costs of production in the short run a) cannot be reduced by producing less output

Accounting Dec 09, 2020

Fixed costs of production in the short run

a) cannot be reduced by producing less output.

b)are a function of the level of variable costs.

c) are low in proportion to variable costs in the short run.

d) increase as the firm produces more output.

Expert Solution

The correct answer is a) cannot be reduced by producing less output.

Since the fixed cost of production does not depend on the level of output produced, reducing or increasing the production level does not influence it. It will remain the same irrespective of the output produced, even at zero production. Thus, the fixed cost is not affected by production decisions.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote