In the short-run, what is the difference between variable costs and fixed costs? Why are fixed costs call sunk? Why would your economics professor never ask you the question, "What is the difference between variable costs and fixed costs in the long-run?"
In Short-Run Fixed Costs does not change irrespective of the level of output. However in Short run Variable Cost per unit changes with the level of output | |||||||
Hence in Short any change in level of output shall change the Total variable cost but will not change the Fixed Costs | |||||||
In the long-run, there is no such concept of variable or Fixed costs as in the long run all components of Total Costs shall change, So asking the difference | |||||||
between Variable cost and Fixed cost make no real sense. | |||||||
Sunk Costs are those costs which once spent can never be recoevered.For this reason these costs are never considered for decision making in the business. | |||||||
One of the example is Resesrach costs incurred in developing a new product | |||||||
So Fixed costs are known as Sunk as once incurred can't be recovered. | |||||||
So in nature All Sunk Costs are Fixed Costs but all Fixed Costs are not Sunk Costs | |||||||
In the short-run, what is the difference between variable costs and fixed costs? Why are fixed...
. Define and explain the difference between the long run and the short-run production functions. Why are short-run costs higher than costs in the long run? Why are the short-run average and marginal cost curves U shaped? What generates a U shape for the long-run average and marginal cost curves?
What is the difference between a firm’s shutdown point in the short run and in the long run? Why are firms willing to accept losses in the short run but not in the long run?
What is the distinction between the economic short run and the economic long run? A. In the short run, the firm incurs only explicit costs, but in the long run, the firm incurs explicit and implicit costs. OB. In the short run, the firm can vary all inputs, but in the long run, at least one input is fixed. O c. In the short run, the firm incurs only variable costs, but in the long run, the firm incurs fixed...
Talk about the difference between long-run and short-run. If you were a business owner, how would you apply these principles to make decisions about your business? You will need to define short-run and long-run from your own knowledge, explain the difference, and then determine what decisions you would have to make in time frames. You may use your Fortune 500 company if you like.
The difference between a fixed and a variable input is that a O A. O B. O C. O D. variable input can be changed in the long run and a fixed input can only be changed in the short run. fixed input changes and a variable input does not. fixed input cannot practically vary in the short run and a variable input can easily vary during the relevant period. None of the above.
3. Answer all three parts: Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or variable costs: advertising expenditures fuel interest on company-issued bonds shipping charges payments for raw materials real estate taxes executive salaries insurance premiums wage payments depreciation and obsolescence charge sales taxes rental payments on leased office machinery. What happens to all costs of production in the long-run? 4. Government can use direct controls in...
Consider the difference between the short run of a few days or weeks and the long run of a few months or years. Suppose the price of gasoline goes up. How will the supply and demand curves be effected in the short run? What will happen to the equilibrium price and quantity of cars? In the long run, how would your answer to part f. change?
How do macroeconomists typically define the difference between the “short run” and the “long run”? Is the classical model of a closed economy (Mankiw, chapter 3) considered a short run model or a long run model? Why?
1. What is the difference between variable and fixed costs? Also, explain how the total variable cost and total fixed cost is affected by increasing the number of units produced? What happens to the total variable cost per unit and total fixed cost per unit? 3. What is a mixed cost? 2. The high-low method of analyzing mixed costs uses only two observation points: the high and low points of activity. Are these always the best points for prediction purposes?...
In the long run, A. inputs that were variable in the short run become fixed. B inputs that were fixed in the short run remain fixed. C variable inputs are rarely used. D inputs that were fixed in the short run become variable.