Costs in the Short Run

Read this section about how to calculate costs in the short-run like variable and marginal costs. Make sure to answer the "Try It" questions.

Fixed and Variable Costs

Answer to Try It Question

  • A
    Incorrect. A represents fixed cost because it is no changing as production rises. B represents variable cost because it is increasing as production rises. C which also rises is total cost, the sum of fixed and variable cost.

  • B
    Correct. B represents variable cost because it is increasing as production rises. C which also rises is total cost, the sum of fixed and variable cost.

  • C
    Incorrect. C is total cost, the sum of fixed and variable cost. B represents variable cost because it is increasing as production rises.