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What is the difference between a linear and a nonlinear cost function? Give an example of each type of cost function. Question content area bottom
What is the difference between a linear and a nonlinear cost function? Give an example of each type of cost function. Question content area bottom Part A A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include a cost function for use of a telephone line where the terms are a fixed charge of $ per year plus a $ per minute charge for phone use. B A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. An example of a linear cost function is a cost function for use of a videoconferencing line where the terms are a fixed charge of $ per year plus a $ per minute charge for line use. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs. C A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. An example of a linear cost function is a cost function for use of a copier where the terms are a fixed lease payment of $ per month plus a $ per page charge for each copy. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. Examples include quantity discounts for material purchases for each units of material purchased. The cost per unit of material will fall for each unites purchased at a time. D A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. An example of a linear cost function is a cost function for use of a videoconferencing line where the terms are a fixed charge of $ per year plus a $ per minute charge for line use.
What is the difference between a linear and a nonlinear cost function? Give an example of each type of cost function.
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A
A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include a cost function for use of a telephone line where the terms are a fixed charge of $ per year plus a $ per minute charge for phone use.
B
A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. An example of a linear cost function is a cost function for use of a videoconferencing line where the terms are a fixed charge of $ per year plus a $ per minute charge for line use. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs.
C
A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. An example of a linear cost function is a cost function for use of a copier where the terms are a fixed lease payment of $ per month plus a $ per page charge for each copy. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. Examples include quantity discounts for material purchases for each units of material purchased. The cost per unit of material will fall for each unites purchased at a time.
D
A linear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is not a straight line. Examples include economies of scale in advertising where an agency can double the number of advertisements for less than twice the costs, stepcost functions, and learningcurvebased costs. A nonlinear cost function is a cost function where, within the relevant range, the graph of total costs versus the level of a single activity related to that cost is a straight line. An example of a linear cost function is a cost function for use of a videoconferencing line where the terms are a fixed charge of $ per year plus a $ per minute charge for line use.
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