An Increase in the Level of Activity Will Have the Following

question 56

Short Answer

An increase in the level of activity will have the following effects on unit costs for variable and fixed costs: $\begin{array}{ll}&\text { Unit Variable Cost } & \text { Unit Fixed Cost } \\A.&\text { Increases } & \text { Decreases } \\B.&\text { Remains constant } & \text { Remains constant } \\C.&\text { Decreases } & \text { Remains constant } \\D.&\text { Remains constant } & \text { Decreases }\end{array}$

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Definitions:

Supply Curve

A graphical representation showing the relationship between the quantity of a good supplied and its price.

Pollution Rights

Tradable permits or licenses that allow the holder to emit a certain amount of pollution; used as an economic tool for controlling and reducing environmental degradation.

Pollution Permits

Allowances issued by governments that give companies the right to emit a certain amount of pollutants, intended to reduce overall pollution by market mechanisms.

Supply

The total amount of a product or service that is available for consumers to purchase at various price levels.