In the long run, Total cost equals Total Fixed CostGroup of answer choicesTrueFalse
Question
In the long run, Total cost equals Total Fixed Cost
Group of answer choices
True
False
Solution
To evaluate the statement "In the long run, Total cost equals Total Fixed Cost," let's analyze the fundamental concepts of cost in economics.
Understanding Total Cost and Total Fixed Cost
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Total Cost (TC): This represents the total expense incurred in the production of goods or services. It includes both fixed and variable costs.
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Total Fixed Cost (TFC): This includes costs that do not change with the level of output, such as rent, salaries, and equipment costs. These costs remain constant regardless of production levels.
Analyzing the Statement
- In the long run, variable costs can change as firms can adjust factors of production, which means that total costs are not solely made up of fixed costs in this time frame.
- Therefore, it is incorrect to say that Total Cost equals Total Fixed Cost, as Total Cost includes both fixed and variable costs.
Final Answer
The statement "In the long run, Total cost equals Total Fixed Cost" is False.
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