Which of the Following Statements Is True About Marginal Analysis

question 85

Multiple Choice

Which of the following statements is true about marginal analysis?

• A) Fixed costs vary with changes in the number of units sold.
• B) Total cost is the sum of average fixed costs and average variable costs times the quantity produced.
• C) Average variable cost equals variable cost times number of units sold.
• D) Average fixed cost increases as the number of units produced increases.
• E) Marginal cost equals fixed costs minus variable costs.

Distinguish between the effects of various types of liabilities and equity on company's financial structure and ratios.

Evaluate the significance of earnings per share in determining a company's profitability and attractiveness to investors.

Understand the calculation of returns, specifically return on total assets and return on equity, and their relevance to overall financial performance.

Calculate working capital and understand its significance.

---

Definitions:

Body Structure

The physical and anatomical makeup of a living organism, including its organs, tissues, and cells.

Cells

The basic structural, functional, and biological units of all living organisms, serving as the building blocks of life.

Semipermeable Membrane

A type of barrier that allows certain molecules or ions to pass through it by diffusion and occasionally specialized "facilitated diffusion."

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms.