Table 3 shows the short-run production costs for a cinema: [table]
Resource | Cost per month ($) Cinema building | 6,500 Staff wages | 2,800 Projectors and screens | 3,500 Popcorn supplies | 1,200 Electricity | 1,000
[/table] In the short run, calculate the cinema's fixed costs in Table 3.

Question

BlackTom AI · Accepted Answer

Fixed costs are costs that do not change with the level of output in the short run — typically payments for capital and equipment that are fixed by contractual or physical constraints (for example, rent on a building or the cost of installed machinery).

Relevant knowledge points:
- Short-run fixed costs: costs of inputs that cannot be varied (capital: building, installed equipment).
- Short-run variable costs: costs that vary with output (labor, raw materials, utilities that depend on usage).

Step-by-step reasoning:
1. Identify each item in Table 3 and classify it.
   - Cinema building ($6,500): capital cost, fixed in the short run → fixed cost.
   - Projectors and screens ($3,500): equipment/capital, fixed in the short run → fixed cost.
   - Staff wages ($2,800): labor cost, typically variable with hours or attendance → variable cost.
   - Popcorn supplies ($1,200): materials/supplies, clearly variable → variable cost.
   - Electricity ($1,000): usage-related utility, treated as variable → variable cost.

2. Sum only the fixed items:
   - Cinema building: $6,500
   - Projectors and screens: $3,500
   - Fixed costs total = 6,500 + 3,500

3. Calculation (intermediate step shown):
   - 6,500 + 3,500 = 10,000

Why this answer is correct:
- Both the building and the projectors/screens are capital inputs whose monthly costs do not change with the number of films shown in the short run, so they are the only fixed costs listed. Adding them yields $10,000.

Why the other options are incorrect:
- a. $11,200 would require treating popcorn supplies (or another variable item) as fixed (6,500 + 3,500 + 1,200), which is incorrect.
- b. $15,000 is the total cost of all items (fixed + variable), not just fixed costs.
- d. $13,300 does not correspond to the correct classification and sum of fixed items in this table.

Conclusion: The cinema’s short-run fixed costs are $10,000, matching answer c.

类似问题

Fixed costs are expenses that ________.

How will fixed cost be affected if production increases by 20%?

How is a fixed cost defined?

7. If you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed costs are $10, then total fixed costs are: A. $5 B. $100 C. $1,020 D. $1,040

6. Which of the following is most likely to be a fixed cost? A. Shipping charges B. Property insurance premiums C. Wages for unskilled labor D. Expenditures for raw materials

Which economic concept was highlighted to explain why pharmaceutical prices are often set well above the marginal cost of production?

Which of the following best represents an example of a fixed cost?

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