The Term Incremental Cost Refers to

question 14

Multiple Choice

The term incremental cost refers to

• A)the profit foregone by selecting one choice instead of another.
• B)the additional cost of producing or selling another product or service.
• C)a cost that continues to be incurred in the absence of activity.
• D)a cost common to all choices in question and not clearly or feasibly allocable to any of them.

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Definitions:

Typical Firm

A representative entity in an industry or market that reflects the common attributes of businesses within that context.

Short Run

A period in economics where at least one input is fixed, meaning that firms can adjust production levels but not capacity.

Long-Run Average-Total-Cost Curve

A curve that shows the lowest cost at which a firm is able to produce a given level of output in the long run, when all inputs can be varied.

Workers

Individuals engaged in a task or activity, especially in the context of employment, to earn wages or salary.