Which of the Following Statements Regarding Fixed Costs Is True

question 53

Multiple Choice

Which of the following statements regarding fixed costs is true?

• A)When production increases, fixed cost per unit increases.
• B)When production decreases, total fixed costs decrease.
• C)When production increases, fixed cost per unit decreases.
• D)When production decreases, total fixed costs increase.

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Definitions:

Business License

A legal authorization granted by government agencies that allows individuals or companies to conduct business within the government's geographical jurisdiction.

Profit Maximizing

The process of adjusting the production and sale of goods and services to achieve the highest possible profit.

Profit Maximizing

A strategy or approach aimed at achieving the highest possible profit from a business operation or investment.

Unit Elastic

A situation where the percentage change in quantity demanded is equal to the percentage change in price, resulting in a price elasticity of demand equal to -1.