The Total Cost of Producing One Unit Is $50

question 98

Multiple Choice

The total cost of producing one unit is $50.The total cost of producing two units is $75.At a production level of two units,the cost function exhibits

• A) economies of scale.
• B) rising average costs.
• C) increasing marginal costs.
• D) constant returns to scale.

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Definitions:

Interest and Taxes

Interest and taxes are financial charges: interest is the cost of borrowing money, while taxes are mandatory contributions levied by governments on individuals and corporations.

NPV

Net Present Value (NPV) is a method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows.

CCA Class

A grouping within the Canadian Capital Cost Allowance system used for categorizing depreciable assets for tax purposes.

After-tax Operating Income

The profit a company generates from its core business operations after taxes have been subtracted, excluding non-operating income and expenses.