Exhibit 2-4 Refer to Exhibit 2-4. as More Fax Machines Are Produced

question 51

Multiple Choice

Exhibit 2-4
Refer to Exhibit 2-4. As more fax machines are produced, the opportunity cost of producing them

• A)increases.
• B)decreases.
• C)remains constant.
• D)first decreases and then increases.

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Definitions:

Fixed Costs

Costs that remain constant irrespective of the level of production or sales, including expenses like rent, salaries, and insurance.

Variable Cost

Expenses that vary depending on the amount of products or services a company generates.

Fixed Costs

Expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Cash Flow

The full measure of money movement into and out of an organization, primarily altering its liquidity status.