Railroad Per Unit Costs Decline as Traffic Increases

question 28

Multiple Choice

Railroad per unit costs decline as traffic increases.What is the reason for this cost behavior?

• A) A high proportion of variable costs in the cost structure
• B) A low proportion of fixed costs in the cost structure
• C) A large proportion of fixed costs in the cost structure
• D) Limited capital investment by the railroads

---

Definitions:

Hypothalamus

Part of the vertebrate brain; in mammals it regulates the pituitary gland, the autonomic system, emotional responses, body temperature, water balance, and appetite; located below the thalamus.

Sensory Nerve Cells

Nerve cells that are responsible for converting external stimuli from the organism's environment into internal electrical impulses.

Sweat Glands

Specialized glands in the skin that produce sweat, a fluid containing water and salts, which helps regulate body temperature.

Skeletal Muscles

Muscles attached to the skeleton that are responsible for movement and are under voluntary control.