Which of the Following Is Not a Nonlinear Cost Function

question 46

Multiple Choice

Which of the following is not a nonlinear cost function?

• A) increase of $20,000 revenues with increase in sales in units
• B) total fixed cost of $25,000
• C) variable cost of $5 per unit
• D) a step cost function

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Definitions:

Profit-Maximizing Output

The level of production at which a company can achieve the highest level of profit based on its costs and the market price.

Profit-Maximizing Price

The price at which a company can sell its product or service to maximize its profit, considering demand and cost.

Demand Curve

A graph that shows the relationship between the price of a good and the quantity of that good consumers are willing to purchase at various prices.

Natural Monopolist

A natural monopolist is a single supplier in a market that can produce the total quantity of a good or service demanded at a lower cost than if there were multiple suppliers, due to high fixed costs and economies of scale.