Suppose that the costs of operating a factory that manufactures copper pipe increase by the following amounts: copper: 6%, labor: 5%, electricity: 4%, taxes: 2%, repairs and maintenance: 3%. By how much have the costs of manufacturing the pipe increased?
A) 20%
B) 4%
C) 6%
D) Less than 2%.
E) Less than 6%.

Question

Quizplus · Accepted Answer

The overall increase in costs is a weighted average of the individual increases, not a simple sum. Since each component contributes differently to the total cost, the overall increase will be less than the highest individual increase (6%).

Suppose That the Costs of Operating a Factory That Manufactures