In Comparing the Changes in TC and TVC Associated with an Additional

question 41

Multiple Choice

In comparing the changes in TC and TVC associated with an additional unit of output,we find that:

• A) the change in TVC is equal to MC,while the change in TC is equal to TFC.
• B) the change in TC exceeds the change in TVC.
• C) the change in TVC exceeds the change in TC.
• D) both TC and TVC are equal to MC.

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Definitions:

Sales Price

The amount of money a buyer pays to purchase a product or service from a seller.

Contribution Margin Ratio

A ratio that measures the portion of sales revenue that exceeds variable costs, indicating how sales affect profitability.