When producers do not have the flexibility to adjust their existing stock of capital with respect to output,the per-unit cost of production is the
A) long-run average total cost.
B) long-run total cost.
C) short-run total cost.
D) short-run average total cost.
E) opportunity cost.

Question

Quizplus · Accepted Answer

The per-unit cost of production in this scenario is the short-run average total cost. This is because in the short run, producers cannot adjust their fixed inputs (capital) and must use their existing stock, leading to a fixed cost component of production. The short-run average total cost includes both variable and fixed costs, which results in a higher per-unit cost than the long-run average total cost.

When Producers Do Not Have the Flexibility to Adjust Their