Cost functions are most useful for estimating costs over short periods such as one year.

Question

Quizplus · Accepted Answer

Cost functions are most useful for estimating costs over short periods such as one year because they are based on the assumption that the cost of production is a linear function of the quantity produced. This assumption is only valid over short periods of time, as in the long run, the cost of production may be affected by factors such as technological change and economies of scale.

Cost Functions Are Most Useful for Estimating Costs Over Short