The correct answer is: C. step constant functions.
A step cost function is a type of cost function in which the cost of production changes in discrete steps as the level of production changes. This is in contrast to a linear cost function, in which the cost of production changes smoothly as the level of production changes.
Step cost functions are often used to model the costs of production in industries with high fixed costs, such as the manufacturing industry. In these industries, the cost of production is relatively high when the level of production is low, but the cost of production does not change significantly as the level of production increases.
For example, consider a company that manufactures cars. The company has a fixed cost of \$100 million per year, regardless of the number of cars that it produces. The company also has a variable cost of \$10,000 per car. This means that the cost of producing 1 car is \$110,000, the cost of producing 2 cars is \$210,000, and so on.
The company’s cost function is therefore:
$$C(x) = 100,000 + 10,000x$$
where $x$ is the number of cars produced.
This is a step cost function, because the cost of production changes in discrete steps as the level of production changes.
The other options are incorrect because they do not describe a type of cost function in which the cost does not change with any change in level of activity.
- A step price function is a type of price function in which the price changes in discrete steps as the quantity demanded changes.
- A step object function is a type of object function in which the value of the function changes in discrete steps as the input variables change.
- A step constant function is a type of function in which the value of the function is constant.