Suppose You Are Charged a $10 Per Month Base Charge

question 133

Multiple Choice

Suppose you are charged a $10 per month base charge for your electrical service.You are also charged an additional $0.08 for every kwh of electricity you use.Which of the following statement is not true?

• A)The $10 base charge is a fixed cost.
• B)The $0.08 charge per kwh is a variable cost.
• C)The total cost is an example of a step cost.
• D)The total cost is an example of a mixed cost.

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Definitions:

Price Elasticity

A concept related to elasticity of demand, specifically measuring how much the quantity demanded of a good responds to changes in its price.

Marginal Cost

The expenditure associated with creating a subsequent unit of a product or service.

Subsidy

A financial contribution or support given by a government or institution to lower the price of a good or service, often intended to encourage production or consumption, reduce costs, or support industries.

Cost Schedule

A detailed listing showing the various quantities of a good or service and the associated costs of producing them.