Two Inputs ______ When They Must Be Combined in a Fixed

question 7

Multiple Choice

Two inputs ______ when they must be combined in a fixed ratio.

• A) are perfect substitutes
• B) are perfect complements
• C) represent Cobb-Douglas technology
• D) are fixed inputs

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Definitions:

High-Low Method

A technique in managerial accounting to estimate fixed and variable costs associated with production by analyzing the highest and lowest levels of activity.

Cost Formula

An equation used to determine the total cost of production or operations by accounting for both fixed and variable expenses.

Maintenance Cost

Expenses incurred in the regular upkeep and repair of equipment, buildings, or machinery to ensure efficient operation and prevent breakdowns.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed costs and generate profit.