Suppose a Company Rents a Building for $250,000 a Year

question 132

Multiple Choice

Suppose a company rents a building for $250,000 a year for the purpose of manufacturing between 80,000 and 140,000 units (the relevant range of activity) . The rental cost per unit of production will __________ as production levels increase.

• A) behave in a nonlinear fashion
• B) increase
• C) decrease
• D) remain fixed

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Definitions:

Rule of Construction

A legal principle used to interpret the meaning and intent of statutes, contracts, or other legal documents.

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A written law passed by a legislative body at the federal, state, or municipal level.

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The freedom to make decisions within the bounds of one's authority, often implying careful judgment and prudence.

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Detailed written works covering particular areas of law, often used as reference by legal professionals and scholars.