The Difference Between Variable Costs and Fixed Costs Is (CMA

question 70

Multiple Choice

The difference between variable costs and fixed costs is (CMA adapted)

• A) Unit variable costs fluctuate and unit fixed costs remain constant.
• B) Unit variable costs are fixed over the relevant range and unit fixed costs are variable.
• C) Total variable costs are constant over the relevant range, while fixed costs change in the long-term.
• D) Total variable costs are variable over the relevant range but fixed in the long-term, while fixed costs never change.

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Definitions:

Cost Of Labor

The total expense incurred by employers to compensate their workforce, including wages, salaries, benefits, and other related costs.

Slope

In mathematics, the slope is the measure of the steepness or the inclination of a line or a segment of a line connecting two points.

Isocost Line

In economics, a line that represents all combinations of a firm’s factors of production that have the same total cost.

Total Cost

The complete expense incurred in the production of a set amount of goods or services, including both fixed and variable costs.