A fixed cost expense that management has little or no control over in the short run is a ________.
Fill in the blank(s) with the appropriate word(s)
Answer: committed fixed cost
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A learning curve may be expressed as a relationship between the labor per unit (L) and the cumulative number of units produced (N)
Which of the following learning curves exhibits a faster reduction in cost of production due to learning, (1 ) L = 10 + N-1 or (2 ) L = 10 + N-0.5? A) Learning curve (1 ) B) Learning curve (2 ) C) Curves (1 ) and (2 ) exhibit the same rate. D) We cannot determine the rate of cost reduction without knowing the value of N.
The price of home computers rises. According to the law of supply, manufacturers will respond to this price increase by
A. keeping computer production steady B. decreasing computer production. C. increasing computer production. D. halting computer production.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
A cartel is formed among the major firms in an industry that maximizes joint profits of the firms. Each firm:
A. will be protected from the economic effects of a recession. B. has the incentive to cheat by cutting its price. C. has a perfectly elastic demand for its product. D. will operate at the level of output associated with the kink in the demand curve.