Which Statements Are TRUE Regarding Risk and Return

question 69

Multiple Choice

Which statements are TRUE regarding risk and return?

• A) Statement I only
• B) Statements I and III only
• C) Statements II and III only
• D) Statements I and II only

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Definitions:

TC/q

Total cost divided by quantity; a formula to calculate the average total cost.

Average Total Cost

The sum of all production expenses divided by the quantity of products made, indicating the per-unit cost.

Average Fixed Cost

The fixed costs of production (e.g., rent, salaries) divided by the quantity of output produced; these costs decline as production increases.

Average Variable Cost

Total variable costs divided by the quantity of output, showing the variable cost per unit of output.