Use the Figure Below to Answer the Following Questions

question 146

Multiple Choice

Use the figure below to answer the following questions.

Figure 27.5.2
-Refer to Figure 27.5.2. The equation of the consumption function is

• A)C = 200 + 0.8YD.
• B)C = 200 + 800YD.
• C)C = 200 + 0.75YD.
• D)C = 200 + 0.25YD.
• E)C = 200 + 200YD.

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Definitions:

Variable Costs

Variable costs are expenses that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Expenses that remain constant regardless of the level of production or sales volume, such as rent or salaries.

Normal Return

The minimum profit necessary for a company to remain competitive in the market, often covering the cost of capital.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and loan payments.