A Curvilinear Relationship Between Variable Costs and Changes in Activity

question 33

Multiple Choice

A curvilinear relationship between variable costs and changes in activity levels suggests what?

• A)A strictly linear relationship between fixed costs and activity levels is implausible.
• B)A strictly curvilinear relationship between changes in activity levels and variable costs is possible only within the relevant range.
• C)Since the relationship between activity levels and variable costs is linear within the relevant range and less linear at lower and higher levels outside the relevant range, the straight-line (linear) relationship takes on a curvature in the real world.
• D)None of the above.

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