Which of These Types of Costs Can Be Ignored When

question 409

Multiple Choice

Which of these types of costs can be ignored when an individual or a firm is making decisions?

• A)sunk costs
• B)marginal costs
• C)variable costs
• D)opportunity costs

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, leading to some degree of market power in setting prices.

Economies of Scale

A proportionate saving in costs gained by an increased level of production, leading to lower costs per unit as volume increases.

Unit Cost

The expense a company experiences in manufacturing, warehousing, and distributing a single unit of a specific product or service.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting surplus value created in productive activities.