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While taking a test, suppose you are distracted by the student next to you who is smacking her gum as she chews it. However, after a few minutes, you no longer attend to the smacking, even though your neighbor keeps doing this. Your response in this situation is best considered to be the result of:
Mixed Cost
A cost that contains both variable and fixed cost elements, making its total expense vary with changes in the level of output.
Fixed Cost
Expenses that do not fluctuate with changes in production volume, staying constant even as production levels vary.
Liability Insurance
A type of insurance that protects an individual or business from the risk of being sued and held legally liable for something such as malpractice, injury, or negligence.
Step-Variable Cost
A cost that remains fixed for a certain level of production or activity, but jumps to a higher amount once a certain threshold is exceeded.
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