What Are the Two Types of Costs That Should Be

question 16

Multiple Choice

What are the two types of costs that should be taken into consideration when understanding cost drivers?

• A)cost of goods sold and operating expenses
• B)cost of startup and cost of operations
• C)cost of pre-startup and cost of operations
• D)employee costs and infrastructure costs

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Definitions:

Willingness To Pay

The maximum amount an individual is prepared to spend on a good or service, which reflects the value they place on it.

Consumer Surplus

The variance between what consumers are prepared to pay for a product or service and the actual amount they end up paying.

Willingness To Pay

This is the maximum amount a consumer is prepared to spend on a good or service, reflecting the value the consumer places on it.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.