1. Problems and Applications Q1 This chapter discusses many types of costs: oppo
ID: 1115837 • Letter: 1
Question
1. Problems and Applications Q1 This chapter discusses many types of costs: opportunity cost, explicit costs, fixed cost, variable cost, average fixed cost, and average variable cost. Fill in the type of cost that best completes each sentence In a pizza industry, the cost of the factory is a(n) fixed cost only in the short run but not in the long run. is always falling as the quantity of output increases. A cost that depends on the quantity produced is a(n) variable cost . The term opportunity cost refers to all the things you must give up for taking some action. The term refers to costs that involve direct monetary payment by the firm. is falling when marginal cost is below it and rising when marginal cost is above it.Explanation / Answer
Answer to blank 1: Fixed cost
Explanation:
Fixed cost is the cost which does not varies as output changes.
Answer to blank 2: Average fixed cost
Explanation:
AFC = TFC / quantity of output
Answer to blank 3: Variable cost
Explanation:
Variable cost is the cost which varies as quantity of output changes.
Answer to blank 4: Opportunity cost
Explanation:
Opportunity cost is the cost of next best alternative when an action is choosen.
Answer to blank 5: Explicit cost
Explanation:
Explicit costs are the payment made to the outsiders for their goods and services provided to the firm.
Answer to blank 6: Average variable cost
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