When Making Decisions About Special Orders

question 21

Multiple Choice

When making decisions about special orders:

• A)if there is idle capacity,opportunity costs need to be considered.
• B)if there is no idle capacity,opportunity costs need to be considered.
• C)Increasing overall profit is the only consideration
• D)none of the options is true

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Definitions:

Total Cost

The total amount of all costs associated with the creation of goods or services, encompassing both constant and changing expenses.

Total Cost Curve

A graphical representation showing how total costs change with changes in the level of output produced.

Isoquants

Curves that represent combinations of various inputs which yield the same level of output.

Isocost Lines

Graphical representations in economic theory that showcase all possible combinations of inputs that can be purchased for a given total cost.