The Aggregate Production Function Is Graphed as

question 83

Multiple Choice

The aggregate production function is graphed as

• A)an upward- sloping line that becomes flatter as the quantity of labour increases.
• B)a downward- sloping curve.
• C)an upward- sloping line that becomes steeper as the quantity of labour increases.
• D)an upward- sloping straight line.
• E)a production possibilities frontier.

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Definitions:

Total Fixed Overhead

The sum of all costs that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, used to cover fixed costs and to generate profit.

Production Capacity

The maximum output that an organization can produce with the available resources in a given period.

Operating Loss

The amount by which the operating expenses of a business exceed its gross profits.