What Is Characteristic of a Committed Fixed Cost

question 55

Multiple Choice

What is characteristic of a committed fixed cost?

• A)It can be easily changed.
• B)It often involves a long-term contract.
• C)It changes when output changes.
• D)It includes direct materials.

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Definitions:

Final Goods

Products that are purchased for consumption by the end user and are not intended to be resold or used in the production of other goods.

Marginal Tax Rates

The rate at which the last dollar of income is taxed, illustrating the percentage of tax applied to your income for each tax bracket in which you qualify.

Supply-Side Economists

Economists who believe that reducing barriers to production and encouraging the supply of goods and services is the most effective way to stimulate economic growth.

Incentives

Rewards or penalties intended to motivate specific behaviors or actions among individuals or entities.