The Least-Cost Way of Producing a Particular Rate of Output

question 205

Multiple Choice

The least-cost way of producing a particular rate of output is represented by a point of tangency between a short-run average cost curve and the

• A)total cost curve
• B)short-run average total cost curve
• C)average variable cost curve
• D)long-run average cost curve
• E)marginal cost curve

---

Definitions:

Support Departments

Units within an organization that provide essential services or assistance to other units rather than producing goods or services directly.

Cost Equations

Mathematical formulas used to calculate the total cost of producing goods or services, often incorporating variable and fixed costs.

Absorption Costing

A method of accounting that encompasses all costs associated with manufacturing (such as direct materials, direct labor, as well as both variable and fixed overhead expenses) in the pricing of a product.

Variable Costing

An accounting method that includes only variable costs—costs that change with production levels—in the calculation of unit cost.