Author Question: The market for apples is an example of ________. A) perfect competition B) monopolistic ... (Read 45 times)

melly21297 · **on:** Jun 29, 2018

The market for apples is an example of ________.

A) perfect competition
B) monopolistic competition
C) monopoly
D) oligopoly

Question 2

Consider a textile factory operating in the short run. Classify the following costs that the firm incurs as variable costs, sunk costs, and fixed costs.

a) Cost of issuing identity cards to all workers
b) Wages paid to workers of the factory
c) Yearly rent paid for production space
d) Tax paid on the sale of its products

komodo7 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

a) Cost of issuing identity cards to all employees is a sunk cost as it is not to be considered while making future production decisions.
b) Wages paid to workers at the mill are variable costs as they change with changes in the output of the production unit.
c) Yearly rent paid for the production space is a fixed cost as the mill has to pay this rent irrespective of the output produced.
d) Tax paid on the sale of the firm's products is a variable cost as the tax will vary depending on the output sold by the firm.