In the Short Run, Which of the Following Is FALSE

question 267

Multiple Choice

In the short run, which of the following is FALSE about the shutdown point?

• A) Total revenue is equal to total fixed cost.
• B) Total revenue is equal to total variable cost.
• C) Product price is equal to the minimum average variable cost.
• D) Price multiplied by quantity must be equal to minimum average variable cost multiplied by quantity.

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Definitions:

Travel Expenses

Costs associated with traveling for the purpose of conducting business-related activities, including transportation, lodging, and meals.

Spending Variance

The difference between the actual amount spent and the budgeted or standard amount expected to be spent.

Power Cost

The expense associated with the consumption of electrical power used in the operations of a business or manufacturing process.

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.