## Understanding Fixed Costs**Fixed Costs** are expenses that:### Multiple Choice- **Option A:** Do not change as production changes. - **Option B:** They are usually contractual obligations such as a fixed rate commercial mortgage loan or installment car loan payments. - **Option C:** The electricity bill is a fixed cost. - **Option D:** Both A and B are correct.### ExplanationFixed costs are financial obligations that remain constant regardless of the level of production or business activity. Examples include rent, salaries, and certain types of loan payments. These costs do not fluctuate with the quantity of goods or services produced.### NoteUnderstanding fixed costs is crucial for budgeting and financial planning within a business, as they represent expenditures that must be met irrespective of business performance.

Fixed cost are the cost that do not depend on level of production

Answered: Fixed Costs are expenses that: Multiple…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Derive (Mathematically and graphically) the cost minimization condition.
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Explicit costs would include: rent. the interest loss of the business owner on money withdrawn from his/her saving account and invested in the business. the loss of rent on a building the business owner owns and uses in his/her business. the opportunity costs of the business owner's time.
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production function is Q = An orange grower has discovered a process for producing oranges that requires two inputs. The min{2x1, x2}, where x₁ and x2 are the amounts of inputs 1 and 2 that he uses. The prices of these two inputs are w₁ = 5 and w₂ = = 2, respectively. The minimum cost of producing 140 units is (a) $980 (b) $630 (c) $1400 (d) $280 (e) $700
Three production processes - A, B, and C - have the following cost structure: the selling price is 5.26 per unit Process Fixed Cost per Year Variable Cost per Unit A 119164 2.54 B 80631 4.52 C 70617 5.27 1. What is the cost of process A for a volume of 7104 units? (round to the nearest cent).
Which of the following is not considered an operating expense? FOB destination Cost of goods sold Advertising expense Administrative expense
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Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
Melody Music Store has a total cost function of TC = 500 + 10Q + 5Q². (a) Find the firm's fixed costs (FC) and variable costs (VC). (b) Find the firm's average fixed cost (AFC), average variable cost (AVC), and average total cost (ATC).

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Fixed Costs are expenses that: Multiple Choice Do not change as production changes. They are usually contractual obligations such as a fixed rate commercial mortgage loan or installment car loan payments. The electricity bill is a fixed cost. Both A and B are correct.