Asked by
Buddy Charles
on Nov 04, 2024
Verified
Dana spends $10,000 on remodeling a storefront that she then opens as a shoe store. The business has not been very successful, and she needs an additional $3,000 to keep the shoe store open. Which of the following is true?
A) The $10,000 Dana spent on remodeling represents a part of the total variable cost of her business.
B) The $3,000 represents her marginal costs of production.
C) The $10,000 Dana spent on remodeling is a fixed cost of her business.
D) The $3,000 Dana needs to keep the deli open represents her total fixed costs.
Fixed Cost
Costs that do not change with the level of production or sales, such as rent or salaries.
Marginal Costs
The cost incurred by producing one additional unit of a product or service.
Total Variable Cost
The sum of all costs that vary with the level of output in the short run.
- Learn the basics of how costs are divided into fixed, variable, and total categories.
Verified Answer
RS
Learning Objectives
- Learn the basics of how costs are divided into fixed, variable, and total categories.