Asked by disney. dreams on Apr 29, 2024
Verified
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.
Doggie Day Care
A service that provides temporary care and activities for dogs during the day.
Inputs
Resources such as labor, materials, and capital that are used in the production process to create goods and services.
Labor
Utilization of human mental and physical effort in the production process of goods and services.
- Gain insight into how fixed and variable costs combine to form total costs and influence decisions within a business context.
Verified Answer
SH
Sakina HussainApr 30, 2024
Final Answer :
C
Explanation :
In the short run, firms typically view labor as variable because they can adjust the number of workers they employ more easily and quickly than they can change their capital inputs, such as buildings, which are considered fixed due to the longer time and higher costs associated with altering them.
Learning Objectives
- Gain insight into how fixed and variable costs combine to form total costs and influence decisions within a business context.