Consider a firm producing a single good with the cost function if , and if . This firm's sunk cost and fixed cost are respectively
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1 markMicroeconomicsCosts of productionOpportunity, explicit, implicit and sunk costsModerateabout 3 min
DSE 2008 Question 9: Costs of production
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Consider a firm producing a single good with the cost function C(x)=5 if x=0, and C(x)=10+10x if x>0. This firm's sunk cost and fixed cost are respectively (A) 10 and 10 (B) 10 and 0 (C) 0 and 10 (D) 5 and 10
Costs of production has come up 83 times in 7 exams since 2006.
What this question tests
This question is on Opportunity, explicit, implicit and sunk costs, part of Costs of production in Microeconomics.
The different meanings of cost and how they separate economic profit from accounting profit.
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Question from the DSE 2008 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.