Fixed costs are:
A. costs that depend on the quantity of output produced.
B. costs that don't depend on the quantity of output produced.
C. inputs costs that stay the same price per unit.
D. costs that are negotiated to stay the same throughout the life of a contract.
Answer: B
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Price elasticities of supply are always:
a. the same as price elasticities of demand. b. negative numbers. c. positive numbers. d. greater than one. e. increased when a tax is imposed.
When the existing firms in a competitive industry have different operating costs:
a. the highest-cost firm in operation breaks even, while the low cost firms will earn profit. b. the highest-cost firm in operation breaks even, while the low cost firms leave the industry. c. the low cost firms earn a larger profit than the high-cost firms. d. the highest-cost firms will incur a deadweight loss.