Table 13-1 Alyson's Pet Sitting Service

question 176

Multiple Choice

Table 13-1
Alyson's Pet Sitting Service

-Refer to Table 13-1.Suppose that Alyson's pet sitting service has a fixed cost of $50 per month for her cell phone.Each worker costs Alyson $60 per day.What is the shape of Alyson's total cost curve as output increases from 45 to 70?

• A) Total cost increases but gets flatter.
• B) Total cost increases and gets steeper.
• C) Total cost decreases and gets flatter.
• D) Total cost decreases but gets steeper.

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Definitions:

Goodwill Impairment

This occurs when there is evidence that the value of goodwill has declined permanently beyond its recoverable amount, necessitating a write-down in its book value.

Amortization

The process of reducing the cost of a tangible or intangible asset through systematic, periodic deductions over its useful life.

Fair Value

An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.

Unrealized Profits

Gains that have been achieved on paper from an investment but have not yet been realized through a sale or transaction.