The fixed-cost fallacy occurs when
a. A firm considers irrelevant costs
b. A firm ignores relevant costs
c. A firm considers overhead or depreciation costs to make short-run decisions
d. Both a and c
d
You might also like to view...
In a perfectly competitive market, the market price is $23. At the current level of output, a firm has a marginal cost of $28. What should the firm do?
A) produce a larger output to make more profit B) nothing, it is currently maximizing profit C) produce less output to make more profit D) shut down E) raise the price of its product
If the dollar depreciates against the Indian rupee
A) The value of Indian imports to the United States does not change. B) Indian imports to the U.S. become less expensive. C) U.S. exports to India become more expensive. D) U.S. exports to India become less expensive.