Attempts: Do No Harm: 16 1. Problems and Applications Q1 This chapter discusses
ID: 1118880 • Letter: A
Question
Attempts: Do No Harm: 16 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) 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) The term refers to all the things you must give up for taking some action.Explanation / Answer
1) In a pizza industry, the cost of factory is a fixed cost only in the short run but not in the long run.
Because, all factors of production are fixed in the short run while in the long run all are variable.
2) Average Fixed cost is always falling as the quantity of output increases.
Because, Fixed cost remains the same for all the quantities produced, therefore a given cost spreads more thinly per unit as quantity increases
3) A cost that depends on the quantity produced is a variable cost.
Because, variable cost is the cost of the variable inputs i.e raw materials, labor etc. Therefore more the quantity produced more the variable inputs are needed or vice versa.
4) The term opportunity cost refers to all the things you must give up for taking some action.
Opportunity cost refers to the benefit that a person could have recieved, but gave up, to take another course of action.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.