If Activity Level Increases,what Happens to the Total Variable Cost

question 22

Multiple Choice

If activity level increases,what happens to the total variable cost?

• A)It remains the same.
• B)It decreases.
• C)It increases.
• D)It depends on how much the activity level increases.

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Definitions:

Quantity Supplied

The quantity of a product or service that manufacturers are prepared to offer for sale at a certain price during a defined time frame.

Inelastic

A characteristic of a good or service whose demand does not significantly change with a change in its price.

Perfectly Elastic

A situation in economics where any small change in the price of a good or service will result in an infinite amount of change in the quantity demanded or supplied.

Total Revenue

The total amount of money earned by a firm from the sale of its products or services before any costs or expenses are subtracted.