When a Firm's Cost Structure Consists Principally of Fixed Costs

question 159

Multiple Choice

When a firm's cost structure consists principally of fixed costs,:

• A)it is said to have a great deal of operating leverage.
• B)those costs consist of rent, depreciation, direct labor, management salaries, direct materials, and utilities.
• C)the firm might be a factory with many people and few machines.
• D)All of the above

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Definitions:

Inspiration

The process of drawing air into the lungs, an essential component of breathing and gas exchange in the respiratory system.

Expiration

The process of releasing air from the lungs through the respiratory system, also known as breathing out.

Uvula

A small, fleshy extension at the back of the soft palate above the throat, playing roles in speech and preventing food from entering the nasal cavity during swallowing.

Soft Palate

The flexible, muscular part at the back of the roof of the mouth, separating the mouth from the nasopharynx during swallowing and speech.