Q35390587
AID: 1825 | 22/03/2019
[Delimiter]
[General guidance]
[Section: Concepts and reason]
Economics: Economics is a subject concerned with the production of wealth. It also
includes production and consumption. Processing of work by the market is also dealt in
economics. It involves organization of trade, industry, and money.
Cost: Cost is any value spent to produce a product or to render any service. The types of
costs are fixed cost and variable cost.
[Section: Fundamentals]
Fixed cost: Fixed cost is a cost that remains the same, irrespective of the increase or
decrease in the value of goods or any services rendered. It is the cost paid by a company
that does not depend on the activities concerned with the business.
Variable cost: Variable cost is a cost that varies according to the output produced or any
service rendered. It is the cost paid by a company that depends on the activities concerned
with the business.
[Delimiter]
[Starting Hint]
Based on the information given in the question, justify the wrong answer.
[Delimiter]
[Step 1]
Justification for the wrong answer:
Cost curve is said to be a graph that represents the cost of production for the function of
the total quantity produced. The cost curves are in different a type which includes the
total and the average cost curve. The following will be treated wrong:
The cost of renting the video equipment is $9.25 per hour if rented for 12 hours.
The cost of renting the video equipment is $8.75 per hour if rented for 12 hours.
The cost of renting the video equipment is $10 per hour if rented for 12 hours.
[Explanation]
It is mentioned to state the correct statement that represents the cost curve. Thus, in the
price of $9.25, it did not achieve 12 hours and the actual hours is 8. At the price of $8.75,
the rented hour is 10 hours. At the price of $10 per hours, the total hours is 7 hours.
[Hint for next step]
Based on the information given in the question, justify the correct answer.
[Delimiter]
[Step 2]
Justification for the correct answer:
It is stated to determine the statement that represents the cost curve. Only at $5 per hour,
the equipment is reaching 12 hours.
Therefore, the cost of renting the video equipment is $5 per hour if rented for 12 hours.
[Answer]
The cost of renting the video equipment is $5 per hour if rented for 12 hours.
[Answer End]
[Answer Choice: Wrong]
The cost of renting the video equipment is $9.25 per hour if rented for 12 hours.
[Answer Choice End]
[Answer Choice: Wrong]
The cost of renting the video equipment is $10 per hour if rented for 12 hours.
[Answer Choice End]
[Answer Choice: Correct]
The cost of renting the video equipment is $5 per hour if rented for 12 hours.
[Answer Choice End]
[Answer Choice: Wrong]
The cost of renting the video equipment is $8.75 per hour if rented for 12 hours.
[Answer Choice End]
