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.

Question

Quizplus · Accepted Answer

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.

Suppose That a "Doggie Day Care" Firm Uses Only Two