You Are Viewing a Graph Which Compares Costs with the Amount

question 38

Multiple Choice

You are viewing a graph which compares costs with the amount of credit extended.Both the carrying costs and the opportunity costs of credit are depicted.What is the function called that represents the summation of these carrying and opportunity costs?

• A)opportunity cost curve
• B)credit extension curve
• C)credit cost curve
• D)terms of sale graph
• E)optimal sales graph

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Definitions:

Increasing Returns to Scale

A situation in which output increases by a greater proportion than the increase in inputs used.

Average Costs

The total cost of production divided by the total quantity produced, reflecting the cost per unit of output.

Isocost Line

A graph representing all combinations of inputs that have the same total cost.

Costs Per Unit

The expenses involved in producing a single unit of a product, including materials, labor, and overhead.