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28 May, 18:50

Which of the following statements is true of a linear cost function? A. It presents total cost as an intercept. B. It presents variable cost as a slope coefficient. C. It presents variable cost as an intercept. D. It presents total cost as slope coefficient.

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  1. 28 May, 20:46
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    Option B It presents variable cost as a slope coefficient

    Explanation:

    The reason is that the total cost function is:

    Y = a + bx

    The total cost in this case is Y, a is fixed cost as an intercept, b is variable cost represented as an slope and coefficient and x is level of activity which is independent of Y.

    So the right answer is option B.
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