Suppose you are charged a $10 per month base charge for your electrical service.You are also charged an additional $0.08 for every kwh of electricity you use.The cost is an example of a
A)Variable cost.
B)Fixed cost.
C)Mixed cost.
D)Step cost.

Question

Quizplus · Accepted Answer

The monthly base charge of $10 is a fixed cost, as it remains the same regardless of how much electricity is used. However, the additional charge of $0.08 per kwh of electricity is a variable cost as it varies depending on usage. Therefore, the overall cost is a combination of both fixed and variable components, making it a mixed cost.

Suppose You Are Charged a $10 Per Month Base Charge