The Cost Formula for Monthly Depreciation Cost in a Factory

question 169

Multiple Choice

The cost formula for monthly depreciation cost in a factory is Total cost = $10,000
This cost

• A) is strictly variable.
• B) is strictly fixed.
• C) is a mixed cost.
• D) is a step cost.

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Definitions:

Returns to Scale

The rate at which output changes if the scale of all inputs is changed by the same proportion.

Output Level

The amount of product or service that is produced by a company or an economy at a given time.

Isoquants

Curves representing combinations of inputs which yield the same level of output in production theory, illustrating technical substitution and factor combinations.

MRTS

Marginal Rate of Technical Substitution; the rate at which one input must increase when another input decreases to keep output constant.