Asked by Yanisa Silalai on Jun 22, 2024
Verified
Refer to Figure 8.4. The vertical distance AB represents
A) total fixed costs.
B) marginal costs.
C) average fixed costs.
D) average total costs.
Marginal Costs
The cost associated with producing one extra unit of a commodity, emphasizing the importance of scale in production.
Average Total Costs
The total cost of production divided by the number of units produced, representing the cost per unit.
Average Fixed Costs
Fixed production costs (unchanged by output volume) divided by the total produced output quantity.
- Understand how fixed and variable costs influence overall expenses, and their variation in relation to production levels.
Verified Answer
HM
Harry McCannJun 25, 2024
Final Answer :
A
Explanation :
The vertical distance AB represents total fixed costs, as it is the portion of the total costs that does not change with the level of output.
Learning Objectives
- Understand how fixed and variable costs influence overall expenses, and their variation in relation to production levels.