In the Long Run,the Amount of Labour-Hours Used Is the Only

question 18

True/False

In the long run,the amount of labour-hours used is the only cost driver of fixed overhead costs.

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Definitions:

Average Fixed Cost

Average Fixed Cost is the fixed expenses of a company divided by the number of units produced, decreasing as production increases.

Marginal Product

The extra output or benefit received from using one more unit of a variable input.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced; it varies with the level of output.

Average-Variable-Cost Curve

A graphical representation showing how average variable costs of production vary with the level of output, typically U-shaped due to economies and diseconomies of scale.