A Cost That Does Not Change as Output Changes Is

question 76

True/False

A cost that does not change as output changes is a variable cost, and one that changes is a fixed cost.

---

Definitions:

Losses

Financial reductions resulting from the operation of a business, particularly when expenses exceed revenues.

Shut Down

In economics, shut down refers to a short-term decision by a firm to cease production because operating costs exceed the revenue generated, particularly when prices fall below variable costs.

Increasing-Cost Industry

An industry in which costs of production increase as output is increased, often due to factors like limited resources or higher input prices.

LRAC Curve

Stands for Long-Run Average Cost curve, which shows the lowest average cost of producing different levels of output when all inputs, including capital, are variable.