A Variable Cost

question 26

Multiple Choice

A variable cost

• A)changes in the same direction and in inverse proportion to changes in operating activity.
• B)changes in the opposite direction and in direct proportion to changes in operating activity.
• C)changes in the same direction and in direct proportion to changes in operation activity.
• D)is synonymous with labor costs

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Definitions:

Total Revenue

The sum total of earnings received by a firm for products sold or services rendered during a particular period.

Demand for Cigarettes

The consumer's desire and willingness to purchase cigarettes at various prices, often studied for its health and economic implications.

Cigarette Taxes

Taxes imposed on the sale of cigarettes to increase revenue for the government and discourage smoking by raising prices.

Inelastic

A characteristic of demand or supply that shows a small response or change to variations in price levels.