The Nature of a Firm's Cost (Fixed or Variable) Depends

question 476

Multiple Choice

The nature of a firm's cost (fixed or variable) depends on the

• A)firm's revenues.
• B)time horizon under consideration.
• C)price the firm charges for output.
• D)explicit but not implicit costs.

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Definitions:

Additional Debt

New borrowing taken on by a company or individual, in addition to any existing debt.

Maximum Capacity

The highest level of output that a company can sustain to make a product or provide a service.

Dividend Payout Ratio

An economic indicator that calculates the proportion of a corporation's profits distributed to its shareholders in the form of dividends.

Fixed Assets

Long-term tangible assets used in a business's operations and not expected to be converted to cash within a year.