Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital). In the short run, the firm most likely considers
a. both labor and capital to be fixed.
b. both labor and capital to be variable.
c. labor to be variable and capital to be fixed.
d. capital to be variable and labor to be fixed.
c
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Because demand curves slope downward according to the Law of Demand, the price elasticity of demand is a negative number
What will be an ideal response?
Which of the following statements is TRUE about the long-run and short-run aggregate supply curve in the classical model?
A) The long-run aggregate supply curve is vertical, and the short-run curve is horizontal. B) The long-run aggregate supply curve is not defined, and the short run curve is vertical. C) The long-run and short-run curves start out horizontal and eventually become vertical. D) The long-run curve is vertical, and there is no short-run curve since all adjustments occur quickly.