Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital). In the short run, Christine most likely considers.

Question

Chaya Bennett

Business

25 March, 19:12

Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital). In the short run, Christine most likely considers.

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Answers (1)

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Brielle Watts · Answer 1

Labor to be variable and capital to be fixed

Explanation:

Christine started off a new firm and only needed her own labor and a computer.

As the business grows there will be more work to be done, so her personal labor will be insufficient. There will be need for extra hands to get tasks done, and also people with specialised skills will need to be hired. Labor will be variable because it will change according to business needs. More employees when work is much and scale down on labor when work is less.

Capital needs will increase to effectively support the growing business, for example tables, chairs, computers, stationery, an office, and other equipment. Capital obtained will be fixed in nature especially land, office building, and office equipment.