Match Each of the Following Costs with the Graph (A-E)

question 172

Short Answer

Match each of the following costs with the graph (a-e) that best portrays its cost behavior as the number of units produced and sold increases.
-Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage
A)Graph 1
B)Graph 2
C)Graph 3
D)Graph 4
E)Graph 5

• A)Graph 1
• B)Graph 2
• C)Graph 3
• D)Graph 4
• E)Graph 5

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Definitions:

Put Option

An agreement in finance allowing the owner to sell a certain quantity of an underlying asset at a set price during a specific period, without being compelled to do so.

Strike Price

The pre-determined price at which the holder of an option can buy (in the case of a call option) or sell (in case of a put option) the underlying asset.

Market Price

The prevailing selling or buying price of a service or asset in the market.

Break-Even Price

The price at which total revenues equal total costs, and the business or investor neither makes a profit nor incurs a loss.