CA Foundation P4 · Chapter 3 · Question 8 of 15
Which of the following is a fixed cost for a firm in the short run?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rent paid for the factory building
Explanation
Fixed costs do not vary with output in the short run; rent on the factory must be paid even at zero output. Raw materials, power and piece-rate wages rise with output and are variable costs.
More Theory of Production and Cost MCQs
- Q10Total cost of producing 10 units is Rs. 1,250 and of producing 11 units is Rs. 1,320. The marginal cost of the 11th unit is:
- Q11Which statement about the relationship between marginal cost (MC) and average cost (AC) is correct?
- Q12The long-run average cost curve is called an 'envelope curve' because:
- Q13A firm's short-run total cost function is TC = 500 + 20Q + Q^2. At Q = 10, average variable cost and marginal cost respectively are:
- Q14Savings arising from the use of larger and more specialised machinery as a firm expands its scale are an example of: