a. A cost analyst showed the company president a graph that portrayed the firms utility cost as semivariable. The president criticised the graph by saying, This fixed-cost component doesnt look right to me. If we shut down the plant for six-months, we wouldnt incur half of these costs. How should the cost analyst respond?

b. Define the term "relevant range" and explain its importance in understanding cost behavior.

c. Describe two criteria that can be used to evaluate a particular regression line.