Certain Fixed Costs That Provide a Firm with the Capability

question 49

Multiple Choice

Certain fixed costs that provide a firm with the capability to produce or sell or both are known as:

• A)capacity costs.
• B)committed costs.
• C)discretionary costs.
• D)opportunity costs.

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Definitions:

Interest Rates

The percentage of a loan amount charged by the lender to the borrower for the use of money, expressed as an annual percentage.

Consumption

The use of goods and services by households or individuals for personal needs or enjoyment, as opposed to investment or production purposes.

Supply of Savings

The total amount of savings that individuals and institutions are willing to lend or invest, available in the economy.

Interest Rates

The fee that lenders impose on borrowers for utilizing funds, represented as a percentage of the principal sum.