Which Best Characterizes the Short-Run Cost Structure of the Railroads

question 11

Multiple Choice

Which best characterizes the short-run cost structure of the railroads?

• A) low variable costs, high direct separable costs
• B) low fixed costs, low variable costs
• C) low joint costs, high separable costs
• D) large proportion of indirect fixed costs

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Definitions:

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Sales

The total revenue a company generates from selling goods or services before any expenses are subtracted.

Profit Margin

A measure of profitability calculated as net income divided by revenue, expressed as a percentage, indicating the portion of each dollar of revenue that results in net income.