In Economics, a Fixed Cost Is a Cost That

question 97

Multiple Choice

In economics, a fixed cost is a cost that

• A) is present only in the short run.
• B) goes up as the level of output goes up.
• C) goes down as the level of output goes up.
• D) does not vary with the level of output.

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Definitions:

Depreciable Asset

An asset subject to depreciation, which means its cost is allocated over its useful life due to wear and tear, deterioration, or obsolescence.

Carrying Amount

The net value of an asset or liability as presented on the balance sheet, accounting for factors like depreciation or amortization where applicable.

Accrual Basis

Accrual Basis is an accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is received or paid.