A linear cost function can only represent fixed cost behaviour.

Name: A linear cost function can only represent fixed cost behaviour.
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Question

Quizplus · Accepted Answer

A linear cost function can represent both fixed and variable cost behaviour. The fixed cost component would be represented by the y-intercept or the coefficient on the constant term, while the variable cost component would be represented by the slope or the coefficient on the independent variable.

A Linear Cost Function Can Only Represent Fixed Cost Behaviour