Which of the Following Is the Best Example of a Long-Term

question 54

Short Answer

Which of the following is the best example of a long-term capacity cost for a trucking company? a. Performing tune-ups on older trucks.
B) Installing a GPS unit in each truck to monitor efficient routes and fuel efficiency in order to serve more customers on a daily basis.
C) Changing the oil annually in each delivery truck.
D) Replacing torn seats in several of the trucks in which truckers have complained

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Definitions:

Average-fixed-cost Curve

A curve that shows the relationship between the average fixed cost of producing a good and the quantity of the good produced, typically declining as production increases.

Marginal Product

The increase in output that results from employing one more unit of a particular input, holding all other inputs constant.

Explicit Costs

Direct, out-of-pocket expenses paid by firms for inputs to production, such as wages, rent, and materials, as opposed to implicit costs which are not directly paid out in cash.

Implicit Costs

The opportunity costs that are not directly paid for or incurred during the production of a good or service.