How Are Fixed Costs Represented Graphically

question 57

Multiple Choice

How are fixed costs represented graphically?

• A)A horizontal line, staying the same irrespective of the level of activity
• B)Starting at zero and increasing as a straight line as activity increases
• C)Starting at a given point and increasing as a straight line as activity increases
• D)The intersection of the total costs and total revenue lines

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Definitions:

Profit-Maximizing

A strategy or point at which a business achieves its highest possible profit under given conditions.

Incurring Losses

The state of experiencing a negative financial result, where expenses exceed revenues.

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, allowing for elements of competition and some degree of market power for each seller.

Total Revenue

The comprehensive total of cash inflow a business gathers from its selling or service operations during a set time period.