Which of the Following Statements Is (Are) TRUE

question 165

Multiple Choice

Which of the following statements is (are) TRUE?
I. If TC = $40,000 and FC = $18,000, then VC = $58,000.
II. Because fixed cost does not vary with output, the fixed cost curve is a vertical line.
III. The total cost and variable cost curves always have the same shape and slope.
IV. When output is zero, total cost equals fixed costs.

• A) I, II, and III
• B) III
• C) II, III, and IV
• D) III and IV

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Definitions:

Gaining Party

The entity in a transaction or situation that achieves an advantage or benefit.

Non-rational Escalation

The phenomenon where individuals or organizations continue to invest in a decision despite evidence of its ineffectiveness, often due to emotional or psychological commitments.

Ego

An individual’s sense of self-esteem or self-importance, which influences their thoughts and behaviors.

Face Saving

Acts or strategies used to preserve one's self-esteem or maintain social respect in a potentially embarrassing or compromising situation.