Exhibit 7-14 Total Cost Curve

question 9

Multiple Choice

Exhibit 7-14 Total Cost Curve
-In Exhibit 7-14, what is fixed cost of producing output?

• A) $0
• B) $3
• C) $10
• D) $46
• E) cannot be determined from the total cost curve

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Definitions:

Sales Price

The amount that a customer pays to purchase a good or service from a business.

Variable Costs

Expenses that fluctuate with the level of output, including costs such as raw materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.