The Long-Run Marginal Cost LMC)is the Increase in the Cost

question 62

Multiple Choice

The long-run marginal cost LMC) is the increase in the cost incurred by the firm when producing one additional output, holding:

• A)neither the workforce nor the production facility constant.
• B)the workforce and the production facility constant.
• C)the workforce constant.
• D)the production facility constant.

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion with the level of output or activity in a business.

Fixed Selling Expenses

Costs that do not fluctuate with sales volume, such as salaries of sales staff and advertising expenses.

Flexible Budget Graph

A visual representation that shows different levels of revenue and expenses based on varying levels of activity.

Direct Labor Hours

The total time workers spend creating a product or providing a service, directly contributing to the finished goods.