Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 6MC
To determine
Reason for occurring fixed cost fallacy.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Large costs incurred in an investment that cannot be easily recovered are called
a.
Variable Costs
b.
Sunk Costs
c.
Marginal Costs
d.
Maximal Costs
The cost that cannot be recovered if a firm goes out of business is known as __________.
a.
Cost of production
b.
Sunk cost
c.
Actual cost
d.
Direct cost
Marginal cost is a. Any cost occurring after “time now” b. The ratio of total cost to total quantity of output c. The market value of an asset at the end of its life less its disposal costs d. The incremental cost of producing one more unit of output.
Chapter 3 Solutions
Managerial Economics: A Problem Solving Approach
Knowledge Booster
Similar questions
- Fixed cost is a. Any cost that does not vary with the quantity of output. b. The ratio of total cost to total quantity of output. c. The market value of an asset at the end of its life less its disposal costs. d. The incremental cost of producing one more unit of output.arrow_forward__________ refers to the additional cost spent to produce one more unit of the product. a. Marginal cost b. Money cost c. Sunk cost d. Average costarrow_forwardAnswer all and get like. Hand written solutions are strictly prohibitedarrow_forward
- a. Define explicit costs and implicit costs. b. Assume the following: * A firm buys a unit of capital for $300. * This capital generates $500 of total revenue for the firm. * This firm could have earned a 10% rate of return from the best alternative use of its $300. Determine the values of explicit cost, implicit cost, and profit. Give economic meaning to the value of profit.arrow_forwardWhich of the following best defines a sunk cost? A. Costs that have already been incurred and cannot be recovered. B. The variable costs associated with increasing production. C. The total costs including both fixed and variable costs. D. Future costs that are expected to be incurred as a result of current decisions.arrow_forwardAnswer a and what u can in b pleasearrow_forward
- A cost that changes with the level of production is called a(n)____cost a.variable b.average total c.marginal b.fixedarrow_forwardIn the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then in this output range there are Select one: a. economies of scale b. increasing marginal returns c. diminishing marginal returns d. decreasing marginal costs e. diseconomies of scalearrow_forwardDiseconomies of scale are present when. Select one or more: a. total costs fall as output rises b. total costs rise as output rises O c. long run average costs rise as output rises d. marginal costs risearrow_forward
- Answer c pleasearrow_forwardA business incurs the following costs: • Labor: $125/unit • Materials: $95/unit • Rent: $450,000/month Assume the firm produces 1 million units per month. The total variable cost, per month, is $ million. The total fixed cost, per month, is $ million. The total cost is $ million. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardActivity‐based costing achieves more realistic allocation of overhead costs by associating these costs with: a. Activities that drive them. b. Activities under the direct control of the Board of Directors. c. Profit. d. Management activities.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning