Suppose You Produce 10 Bikes a Day for a Total

question 382

Multiple Choice

Suppose you produce 10 bikes a day for a total cost of $1000. Total costs increase to $1100 when you produce 15 bikes. Finally, total costs increase to $1300 if you make 20 bikes. A graph showing the relationship between total costs and the number of bikes produced would be

• A) a negatively-sloped line that becomes flatter.
• B) a negatively-sloped line that becomes steeper.
• C) a positively-sloped line that becomes flatter.
• D) a positively-sloped line that becomes steeper.

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Definitions:

Goodwill

An intangible asset that arises when a buyer acquires an existing business and pays a price higher than the fair value of the identifiable tangible and intangible assets.

Merger Transaction

A corporate action where two or more companies are consolidated into one entity, often to enhance competitiveness or grow market share.

Accounts Payable

Liabilities owed by a company to creditors or suppliers for goods and services received but not yet paid for.

Operating Activities

Activities directly related to the day-to-day operations of a business, including the production, sales, and delivery of the company's product and services.