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Q. 1- Critical Thinking Questions.

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Found in: Page 504

### Economics Today

Book edition 19th
Author(s) Roger Miller
Pages 753 pages
ISBN 9780134478777

# In your view, is a retailing firm's shrink likely to contribute mostly to its fixed costs or variable costs? Explain your reasoning.

This is because it was originally designed to place objects in orbit and is used to transport people to and from space.

See the step by step solution

## Step1: Introduction.

Shrinkage is the loss of goods of occurrences including such shoplifting, vendor fraud, employee theft, and clerical error. The difference between the recorded inventory as well as the actual inventory is referred to as shrinkage.

## Step2: Reason for the retailing firm's shrink likely to contribute mostly to its fixed costs or variable costs.

Yes. They are consistent inputs. Because it was originally used to place items in orbit, it is now used to transfer personnel to and from orbit. It is classified as a fixed input because it will be used for space travel later on.