Due to the Indivisibility of Output

question 146

Multiple Choice

Due to the indivisibility of output,

• A)market supply must be rougher than the individual firm's supply curve.
• B)market supply can be smoother than the individual firm's supply curve.
• C)an individual firm's supply curves cannot be summed.
• D)it is impossible to obtain a valid market supply curve.
• E)market supply is always equal to any individual firm's supply.

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Definitions:

Variable Component

A part of a cost or expense that varies directly with the level of output or activity.

Fixed Component

A cost that remains unchanged in total regardless of changes in the level of activity or output over a certain period.

Overapplied

This refers to the condition in which the allocated costs in an accounting system exceed the actual costs incurred, often in the context of overhead or indirect costs in manufacturing.

Variable Component

Part of a cost or expense that changes in proportion with the level of activity or volume of output.