What is the difference between a linear and nonlinear cost function. Give an example of each.
Linear cost function is when within a relevant ranges the graph of total costs compared to the level of activity related to that cost is a straight line. Example Telephone line 10,000 fixed +2./min charge for phone use. NON-Linear within a relevant range the graph of total cost vs the level of single activity related to that cost isn't a straight line. Example: Step cost function
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