When the Level of Activity Increases, Total Fixed Costs

question 101

Multiple Choice

When the level of activity increases, total fixed costs

• A)decrease.
• B)remain the same within the relevant range.
• C)decrease inversely with the change in activity.
• D)increase within the relevant range.

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Definitions:

Upward Sloping

A term describing a line on a graph that moves higher as you move from left to right, used in various economic contexts.

Long-Run Supply Curve

A graphical representation showing the relationship between market prices and the amount of output produced over time, considering all inputs as variable.

Resource Prices

The costs associated with acquiring inputs used in the production process, including raw materials, labor, and capital.

Industry Output Expands

An increase in the total production of goods and services by companies within a particular sector of the economy.