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

question 152

Multiple Choice

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

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

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Definitions:

Economic Efficiency

A state where resources are allocated in a way that maximizes the production of goods and services while minimizing waste and inefficiencies.

Fundamental Questions

Basic economic questions that include what to produce, how to produce, and for whom to produce, reflecting scarcity and resource allocation.

Market Economy

An economic system in which supply and demand determine the production and allocation of resources through decentralized decision-making.