The Type of Cost Relationship That Exists When Costs Remain

question 31

Multiple Choice

The type of cost relationship that exists when costs remain the same at certain levels of output, and then jump to higher levels when the level of a cost driver increases past certain points, is

• A) Fixed responsiveness
• B) Proportional responsiveness
• C) Semi-variable cost relationship
• D) Step cost relationship

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Definitions:

Shortage

A situation in which demand for a good or service exceeds its supply in a market, often leading to higher prices.

Price Per Bag

The cost of purchasing a specific product quantified by bag units, commonly used in the sale of bulk items or produce.

Demand and Supply of Gasoline

The demand and supply of gasoline refer to the quantity of gasoline consumers are willing to buy at various prices and the quantity of gasoline producers are willing to sell at these prices, respectively.

Initial Equilibrium

The state where supply and demand balances are met at the beginning of an analysis, setting the baseline prices and quantities.