PRC-2 · Chapter 2 · Question 28 of 45
In a standard linear total cost function formatted as C(x) = mx + c, what specific financial component does the y-intercept 'c' represent?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Total Fixed Costs
Explanation
In a linear cost model, the y-intercept is the point where production x is exactly zero. The cost incurred at zero production represents the total fixed costs of the operation.
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