Figure 21-1 Which of the Graphs in Figure 21-1 Illustrates the Behavior

question 152

Multiple Choice

  Figure 21-1
Which of the graphs in Figure 21-1 illustrates the behavior of a total fixed cost?

• A) Graph 2
• B) Graph 3
• C) Graph 4
• D) Graph 1

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Definitions:

Economies Of Scope

Cost advantages that enterprises obtain by producing a wide variety of products, rather than specializing in the production of a single product or a very few products.

Economies Of Scale

A situation where the cost per unit of output decreases as the scale of production increases.

Unit Costs

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.

Diseconomies Of Scope

A situation where the cost of producing multiple products or services together is higher than producing them separately.