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GCE Economics 1990 Question 20

Question 20

Theory of Costs and Revenue

The notion of short-run and long-run periods is responsible for grouping costs into

  1. A.fixed and variable
  2. B.implicit and explicit
  3. C.average and total
  4. D.capital and running
  5. E.money and opportunity.
Show the answer and explanation

Answer: A (fixed and variable)

Explanation

In the short run some costs are fixed and others variable; in the long run all costs are variable.