A step-function cost refers to an item of expenditure where costs increase in a step-like pattern with rising activity levels. Unlike linear cost functions, step-function costs do not change continuously but incrementally at certain thresholds of activity.
An item of expenditure that increases in total as activity rises but in a stepped, rather than a linear, function.
A stepped cost, also known as a semi-fixed cost, is an expense that remains fixed over a certain level of activity or production but changes by a fixed amount when the activity level significantly increases or decreases beyond specific thresholds.
