When More Capital Is Used in Production

question 164

Multiple Choice

When more capital is used in production,

• A)the average total cost curve shifts left.
• B)the average fixed cost curve shifts up.
• C)fixed costs do not change, by definition.
• D)only the respective fixed cost curves are affected.
• E)the average variable cost curve does not change.

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Definitions:

Safety Inventory

Extra inventory held to guard against uncertainty in demand or supply, ensuring that demand can be met without stockouts.

Inexpensive Mode

A cost-effective way or method of completing a task or process, often referring to transportation or production methods.

High Value

Items or services that are considered to be of great importance or worth, often commanding a high price in the market.

Disaggregate

To break down a large, complex data set or structure into smaller, more detailed parts.