An Insurance Agent Rents a Building and Has a Three-Year

question 49

Multiple Choice

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

• A) total cost and average variable cost.
• B) total variable cost and average variable cost.
• C) total fixed cost and total variable cost.
• D) total fixed cost and average fixed cost.
• E) total variable cost and total cost.

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Definitions:

Break-Even Point

This is the point at which total revenues equal total costs, and the business or project makes neither a profit nor a loss.

Firm's Output

The quantity of goods or services produced by a firm within a given time period.

Short Run

A period in economics where at least one factor of production is fixed and cannot be changed.

Firm's Output

This refers to the quantity of goods or services produced by a firm within a given time period.