Which One of These Is Both a Product Cost and a Fixed

question 31

Multiple Choice

Which one of these is both a product cost and a fixed cost in the short run?

• A)Monthly electric bill for manufacturing facility
• B)Salary for company CEO
• C)Overtime pay for production employees
• D)Sales commission paid based on monthly sales
• E)Monthly lease payment for production equipment

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Definitions:

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Long Run

An economic period in which all inputs, including capital, can be adjusted, allowing firms to fully adapt to market changes.

Output

The total amount of goods and services produced by an economy or a production process over a certain period of time.

Marginal Cost

The cost of producing one additional unit of a product or service, which varies depending on the level of production.