Managers Should Discontinue a Business If Which of the Following

question 44

Multiple Choice

Managers should discontinue a business if which of the following is less than the sum of relevant fixed costs and opportunity costs?

• A) Profit
• B) Variable cost
• C) Total cost
• D) Contribution margin

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Definitions:

Spontaneous

Occurring without external cause or premeditation, often resulting from a natural inclination or impulse.

Economic Generalization

Broad statements or principles about economic behavior that apply to different contexts and situations.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

Anomaly

An irregularity or deviation from what is standard, normal, or expected.