Which of the Following About Costs Is True

question 62

Multiple Choice

Which of the following about costs is true?

• A) The difference between the ATC and AVC curves will decline as output expands.
• B) The AFC will remain constant as output increases.
• C) If ATC is increasing, then AVC must be greater than ATC.
• D) Implicit costs and fixed costs are always the same.

---

Definitions:

Quality Control Chart

A graphical tool used in process monitoring to analyze and understand variability in production or service delivery.

Defects Per Unit

A measure of the average number of defects found in each unit of a product.

Acceptance Sampling

A statistical quality control method used to decide whether to accept or reject a batch of material based on the inspection of a sample, aiming to ensure product quality while minimizing inspection costs.

LTPD

Lot Tolerance Percent Defective, a statistical measure in quality control that represents the maximum acceptable defect rate for a batch of products.