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:

Perfectly Inelastic

A market condition where demand does not change regardless of changes in price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of the product, like alcohol, tobacco, and gasoline.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable due to market failure or interventions.