The Total Cost of Reaching Consumers (C) Depends Upon the Number

question 16

Multiple Choice

The total cost of reaching consumers (C) depends upon the number of consumers (N) , advertising costs (A) , and transportation costs (T) . The linear cost prediction model is represented as: C = c - nN + aA + tT
Where c, n, a, and t are constants and c estimates the total cost when the remaining variables are zero. Which of the following interpretations is true about this model?

• A) Change in variables N, A, and T will cause n, a, and t to change.
• B) As n decreases, c will increase.
• C) When variables N, A, and T are zero, C = c - n + a + t.
• D) Change in variables N, A, and T will not reflect any changes in c.

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