Which of the Following Is an Example of a Cost

question 23

Multiple Choice

Which of the following is an example of a cost that is variable with respect to the number of units produced and sold?

• A) Insurance on the headquarters building.
• B) Power to run production equipment.
• C) Supervisory salaries.
• D) Amortization of factory facilities.

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Definitions:

Interest-Rate Cost-Of-Funds

The cost to borrowers or the rate paid to savers and investors based on the interest rates in the financial markets or the rate of return required on investment funds.

Marginal Cost Curve

A graphical representation depicting the cost added by producing one more unit of a particular good, often upward sloping due to increasing costs.

Total Product Curve

A graphical representation that shows the total quantity of output a firm produces, given a fixed amount of inputs, as the amount of one input varies.

Marginal Revenue Curve

A graphical representation showing the change in total revenue that results from selling one additional unit of a product or service.