A Graph That Maps Output Against the Input Required to Make

question 52

Multiple Choice

A graph that maps output against the input required to make that output is called a/an

• A)average cost function.
• B)a production function.
• C)a cost function.
• D)a marginal cost function.

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Definitions:

Total Revenue

The overall amount of money generated by a business from its activities, typically from sales of goods or services before any expenses are deducted.

Marginal Cost Curves

A graphical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Law of Diminishing Returns

Law of Diminishing Returns states that in a production process, adding an additional factor of production, while holding all others constant, will at some point yield lower per-unit returns.

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded, and should not influence current or future decisions.