In the Graph Below,the Price of Capital Is $500 Per

question 70

Multiple Choice

In the graph below,the price of capital is $500 per unit.Between 30,000 and 50,000 units of output,how much does each additional unit of output add to long-run total cost?

• A)$1.50
• B)$2.45
• C)$300
• D)$30,000
• E)none of the above

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term financial health and operational efficiency.

Spontaneous Financing

Financing that occurs naturally as a company operates, such as trade credit that increases as sales increase.

Working Capital Accounts

Accounts that reflect a company's current assets minus its current liabilities, providing a snapshot of its short-term financial health and operational efficiency.

Borrowing Rate

The interest rate that a lender charges a borrower for the loan of funds, varying based on credit risk, loan amount, and duration.