Which Cost Is a Fixed Cost for the First Year

question 20

Multiple Choice

Which cost is a fixed cost for the first year of production?

• A) the cost of plastic that increases as the price of oil increases
• B) the cost of electrical utilities each month
• C) the cost of part-time workers during peak production season
• D) property taxes for a storage facility

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Definitions:

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Total Revenue

The overall income generated by a business from its sale of goods or services, calculated as the price per unit times the number of units sold.

Elasticity Of Supply

A measure of how much the quantity supplied of a good changes in response to a change in price.

Price Elastic

A characteristic of goods for which demand or supply changes significantly when the price changes.