The Change in Variable Costs Is Calculated As

question 54

Multiple Choice

The change in variable costs is calculated as:

• A) The sum of the variable costs divided by the volume of activities which is then multiplied by the change in activity levels.
• B) The sum of the variable costs multiplied by the change in activity levels.
• C) The sum of the variable costs divided by the activity levels which is then multiplied by the change in volume of activities.
• D) The sum of the variable revenues divided by the volume of activities which is then multiplied by the change in activity levels.

---

Definitions:

Price Takers

Market participants who accept the prevailing market price without having the influence to change it due to their relatively small size in the market.

Loss-minimizing

A strategy employed by businesses to reduce the amount of financial losses incurred during unfavorable market conditions or through poor operational decisions.

Units of Output

The quantity of product produced, serving as a measure of a firm's or industry's total production.

Profit-maximizing

A strategy or approach aimed at achieving the highest possible profit, where revenue exceeds costs by the greatest amount.