Figure 3-1.Total cost = Fixed cost + (Variable Rate * Output)
-Refer to Figure 3-1. In the cost formula above which element would be the intercept?
A) fixed cost
B) total cost
C) output
D) variable rate

Question

Quizplus · Accepted Answer

The intercept in the cost formula is the fixed cost, which is the cost that remains constant regardless of the level of output. It represents the cost that a company incurs even if it produces nothing.