Variable Costs

question 73

Multiple Choice

Variable costs

• A)decrease with increasing output.
• B)increase with decreasing output.
• C)decrease with decreasing output.
• D)might increase or decrease with increasing output.

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Definitions:

Demand Satisfaction

The degree to which the needs and desires of customers for a product or service are met by a company.

Over-Capacity

The condition of having more production or service capacity than currently needed, which can lead to inefficiencies, increased costs, and downward pressure on prices.

Flexible Capacity

The ability of a production system to adjust and scale its output up or down to match demand variations.

Production Flows

The sequence and processes involved in the production of goods, from raw materials to finished products.