Even in the short run,a small business must set the price of a product at least equal to the ________ costs (per unit),or it must shut down.
A)fixed
B)variable
C)total
D)invariable

Question

Quizplus · Accepted Answer

The variable costs are the costs that vary with the level of production, such as raw materials, labor, and utilities. These costs must be covered by the price of the product in order for the business to remain profitable in the short run. Fixed costs, on the other hand, are the costs that do not vary with the level of production, such as rent and salaries, and although they are important for the long-term survival of the business, they do not determine the minimum price for a product in the short run. Total costs are the sum of fixed and variable costs, and invariable costs do not exist in economics.

Even in the Short Run,a Small Business Must Set the Price