Which of the Following Costs Is Irrelevant in Making a Decision

question 99

Multiple Choice

Which of the following costs is irrelevant in making a decision about a special order price if some of the company facilities are currently idle?

• A)direct labor
• B)equipment depreciation
• C)variable cost of utilities
• D)opportunity cost of production

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Definitions:

Individual Firm's Demand Curve

A graphical representation showing the quantity of a good that a single firm is willing and able to sell at different prices.

Perfect Competition

A market structure where numerous small firms compete against each other, and products are identical, leading to no single company influencing the market price.

Profit-Maximizing

The strategy employed by an enterprise to determine the price and output that yields the maximum profit.

Loss-Minimizing

A strategy or approach aimed at reducing the amount of losses an individual or organization may incur.