Which cost remains unchanged when a firm increases output in the short run, assuming its fixed inputs do not change?
Correct answer: A. Total fixed cost
- A. Total fixed cost
- B. Total variable cost
- C. Marginal cost
- D. Average variable cost
Explanation
Fixed cost is tied to fixed inputs and does not vary with output in the short run. Variable, marginal and average variable costs can change as production changes.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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