What is characteristic of step costs?
A)remain the same within the relevant range
B)have an increased fixed component at specified intervals
C)increase in direct proportion to increases in output
D)decrease in direct proportion to increases in output

Question

Quizplus · Accepted Answer

Step costs are fixed costs that increase or decrease in large increments at specified levels of output or activity. These increments create steps or stairs in the cost function. Therefore, step costs have an increased fixed component at specified intervals.

What Is Characteristic of Step Costs