When estimating a cost function, cost behavior can be approximated by a linear cost function within the relevant range?
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COST FUNCTION
a mathematical representation of how a cost changes with changes in the level of activity relating to that cost
Variable cost
cost that change in total in relation to some chosen activity or output
Fixed cost
costs that do not change in total in relation to some chosen activity or output
mixed cost
cost that have both fixed and variable components; aka semi variable cost
a mathematical representation of how a cost changes with changes in the level of activity relating to that cost
Variable cost
cost that change in total in relation to some chosen activity or output
Fixed cost
costs that do not change in total in relation to some chosen activity or output
mixed cost
cost that have both fixed and variable components; aka semi variable cost
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