The cost of accomodating one more fan in a stadium that is not at full capacity (the game is not sold out) is almost zero because the stadium has the infraestructure to accomodate hundreds or thousands of fans.
The only cost is probably cleaning after the fan in case he or she throws away something in in or around his or her seat.
A hedge fund is a private investment fund that almost exclusively markets itself for rich investors. Since middle and lower classes are normally unable to invest in hedge funds due to financial limitations, hedge funds have traditionally been permitted to operate under considerably lower regulatory oversight by the Securities and Exchange Commission (SEC).
1. The cost of a hard drive installed in a computer. DIRECT MATERIAL COST.
The business of the company is to make computers so when it comes to hard drives, these are fundamental parts of a computer so they will be classified as direct materials since they are directly involved in the production process.
2. The cost of advertising in the Puget Sound Computer User newspaper. SELLING COST.
Advertising is done to be able to sell gods and services so it will fall under selling costs.
3. The wages of employees who assemble computers from components. DIRECT LABOR COST.
The labor cost of those that are involved in the direct manufacture of the computer will be considered direct labor as they are directly involved in the production process.
4. Sales commissions paid to the company’s salespeople. SELLING COST.
Sales commissions are paid to encourage the salespeople to sell more so this is a selling cost as it is incurred to increase sales.
If the output is increased in the long run, average production costs in the presence of internal economies of scale will<u>decrease</u>, and in the presence of external economies of scale, will<u></u><u>decrease</u>.
Internal economies of scale arise from factors that measure a firm's production efficiency and are controlled by management. Major changes within the industry create external economies of scale. Therefore, as the industry grows, the average cost of doing business will drop.
Internal economies of scale refer to benefits that arise within a company. For example, a larger company may be able to obtain a higher level of credit. In contrast, external savings occur within the industry rather than outside the organization, making them more efficient.