The fixed costs from adding a second shift to a factory can best be described as a
A)step variable-cost function
B)linear cost function
C)curvi-linear cost function
D)fixed-step curve
E)step fixed-cost function

Question

Quizplus · Accepted Answer

Fixed costs do not change based on the level of output, and adding a second shift to the factory would result in a fixed increase in costs. Therefore, the best choice to describe this cost function is a step fixed-cost function.

The Fixed Costs from Adding a Second Shift to a Factory