Total costs in the short-term are classified into fixed costs and variable costs. Which one of the following is a variable cost?
A). Cost of raw material
B). Cost of equipment
C). Interest payment on past borrowing
D). Payment of rent on buildings
What best explains a shift in market supply curve to the right?
A). An advertising campaign is successful in promoting the good
B). A new technique makes it cheaper to produce the good
C). The government introduces a tax on the good
D). The price of raw materials increases
When a competitive firm achieves long run equilibrium, then,
A). P=MC
B). MR=MC
C). P=ATC
D). All of the above
The classical theory explained interest as a reward for
A). Parting with liquidity
B). Abstinence
C). Saving
D). Inconvenience
Which of the following cost curves is never U-shaped?
A). Average cost curve
B). Marginal cost curve
C). Average variable cost curve
D). Average fixed cost curve