The Reason the Change in Total Cost Divided by the Change

question 147

Multiple Choice

The reason the change in total cost divided by the change in output is equal to the change in total variable cost divided by the change in output, is because

• A)total variable cost rises as output rises.
• B)of the law of diminishing marginal returns.
• C)total fixed cost does not change as output changes.
• D)total cost does not change as output changes.

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Definitions:

Cash Flow Hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecast transaction.

Exposure Hedge

A financial strategy utilized to minimize the risk associated with exposure to adverse movements in foreign exchange rates, interest rates, or commodity prices.

Debt Extinguishment

The process of discharging or settling a debt, either through repayment or through a financial restructuring agreement.

Bond Premium

The amount by which the market price of a bond exceeds its par value, typically arising when the bond's interest rate is higher than the market rate.