Costs in a step cost function increase by discrete amounts as the level of activity increases from one range to the next.

Name: Costs in a step cost function increase by discrete amounts as the level of activity increases from one range to the next.
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Question

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In a step cost function, costs remain constant within a certain range of activity levels and then increase by discrete amounts as the activity level moves to the next range. This results in a step-like increase in costs.

Costs in a Step Cost Function Increase by Discrete Amounts