Bates Motel's cost function based on guest- days of occupancy for custodial cost is given as: Y = $30,000 + $7.50X. Bates Motel expects an occupancy level of 10,000 guest days. Bates Motel's expected total fixed cost is:
A) $30,000
B) $7.50
C) $75,000
D) $105,000

Question

Quizplus · Accepted Answer

The total fixed cost is the constant term in the cost function, which is $30,000.

Bates Motel's Cost Function Based on Guest- Days of Occupancy