A nonlinear cost function
A) has two constants and a single slope.
B) does not effectively describe the behaviour of costs all of the time.
C) never describes the behaviour of costs in relation to the cost driver.
D) always describes the behaviour of costs in relation to the cost drivers.
E) means the relevant range cannot be determined for that cost.

Question

Quizplus · Accepted Answer

Nonlinear cost function does not always effectively describe the behavior of costs in relation to the cost driver. It may have changing slopes, curvatures or other complexities that cannot be captured by a simple equation with a constant slope.

A Nonlinear Cost Function