Mr Chan was a lorry driver of a construction company. Last year, he left the company and began to work on his own with his lorry, taking orders directly from customers.
a) Explain whether Mr Chan runs a firm.
b) Suggest ONME fixed cost and ONE variable cost in the above production process. Explain your answer.
- Kwok WaiLv 71 decade agoFavorite Answer
a) Mr Chan is running a firm as he is an entrepreneur and managing the firm's resources. Besides, he will make all the business decisions of his firm.
b) Fixed cost- cost of purchasing the lorry. Mr Chan bought and psid for the lorry. This cost is irrelevant to his firm's production. However, the cost of petroleum on the lorry is a variable cost, which depends on the firm's production and output.
2008-05-20 10:55:57 補充：
a) He also involve production of lorry services to construction companies.