A Company Observed a Decrease in the Cost Per Unit

question 61

Multiple Choice

A company observed a decrease in the cost per unit. All other things being equal, which of the following is most likely true?

• A) The company is studying a variable cost, and total volume has increased.
• B) The company is studying a variable cost, and total volume has decreased.
• C) The company is studying a fixed cost, and total volume has increased.
• D) The company is studying a fixed cost, and total volume has decreased.
• E) The company is studying a fixed cost, and total volume has remained constant.

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Definitions:

Empiricism

A philosophical theory or approach emphasizing the importance of observation and experiment in the acquisition of knowledge.

Observations

The act of monitoring or recording systematically selected variables or phenomena to gather data for analysis.

Illusory Correlation

The mistaken perception of a relationship between two variables that are, in fact, not related.

Cognitive Bias

A systematic pattern of deviation from norm or rationality in judgment, where individuals create their own "subjective reality" from their perception.