Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A) Past costs are always relevant for decisions and are often useful in estimating future cost behavior
• B) Past costs are always relevant for decisions, but are rarely useful in estimating future cost behavior
• C) Past costs are never relevant for decisions, nor are they useful in estimating future cost behavior
• D) Past costs are never relevant for decisions, but are often useful in estimating future cost behavior

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, such as labor or capital.

Marginal Product

The additional output resulting from the use of one more unit of a production input, keeping all other inputs constant.

Wage Rate

The amount of money paid to an employee per unit of time or output, typically expressed per hour or piece.

Competitive Output Market

A market structure characterized by many producers supplying homogeneous products, where no single producer can influence the market price.