Within the Relevant Range of Activity,how Will Variable Cost Per

question 103

Multiple Choice

Within the relevant range of activity,how will variable cost per unit behave?

• A) It will increase in proportion with the level of activity.
• B) It will remain constant.
• C) It will vary inversely with the level of activity.
• D) Its behaviour cannot be determined without additional information.

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Definitions:

Workers

Individuals engaged in a particular task or activity for wages or salary.

Price Floor

A government- or group-imposed price control or limit on how low a price can be charged for a product.

Equilibrium Price

The cost factor at which the supply side and demand side of goods reach an equilibrium in the market.

Market Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, often leading to price reductions.