WAEC Economics 2023 Objective — Question 19
Question 19 of 50 from the West African Examinations Council (WAEC) Economics 2023 Objective paper, with the correct answer and a full explanation.
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If a firm retrenches some of its factory workers its A. fixed cost is likely to increase. B. marginal cost may increase. C. average fixed cost may increase. D. variable cost will decline.
- A. fixed cost is likely to increase
- B. marginal cost may increase
- C. average fixed cost may increase
- D. variable cost will declineCorrect
Explanation
Labour cost is a variable cost; retrenchment will lead to a decrease in the variable cost of the company.
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