A steel mill has fixed costs of $100 per hour and variable costs of $50 per hour. what will happen to these costs if the mill closes?

a. both fixed and variable costs will remain the same.

b. the mill will have no fixed costs or variable costs.

c. the fixed costs will decrease, but the variable costs will increase.

d. the variable costs will drop, but the fixed costs will stay the same.

Question

Mathematics

Brenda Matthews

18 April, 22:54

A steel mill has fixed costs of $100 per hour and variable costs of $50 per hour. what will happen to these costs if the mill closes?

a. both fixed and variable costs will remain the same.

b. the mill will have no fixed costs or variable costs.

c. the fixed costs will decrease, but the variable costs will increase.

d. the variable costs will drop, but the fixed costs will stay the same.

+4

Answers (2)

Know the Answer?

Richmond · Answer 1

The fixed cost of the steel mill will not be affected with the mill closing. However, the variable cost is dependent on it. The answer to the question above is letter "D. The variable costs will drop, but the fixed costs will stay the same".

Solomon · Answer 2

The answer would be D).