Variable Costs Will Generally Be Relevant for Decision Making Because

question 129

Multiple Choice

Variable costs will generally be relevant for decision making because they:

• A) Differ between decision options.
• B) Are volume-based.
• C) Have not been committed and are likely to differ between decision alternatives.
• D) Differ between decision options and have been committed.
• E) Measure opportunity cost.

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Definitions:

Surplus

At a given price, the amount by which quantity supplied exceeds quantity demanded; a surplus usually forces the price down.

Supply Curve

A graph showing the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Lobster Farms

Aquaculture facilities dedicated to the breeding, raising, and harvesting of lobsters for commercial use and consumption.

Algae

A diverse group of photosynthetic organisms that are not necessarily closely related, and that live in a variety of water environments.