Outside the Relevant Range, Variable Costs, Such as Direct Material

question 154

Multiple Choice

Outside the relevant range, variable costs, such as direct material costs ________.

• A) will decrease proportionately with changes in sales volumes
• B) will remain the same with changes in production volumes
• C) will not change proportionately with changes in production volumes
• D) will increase proportionately with changes in sales volumes

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Definitions:

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.

Equilibrium Price

The price in the market where the amount of a product that consumers want to buy is the same as the amount available for sale, resulting in a balanced market situation.

Demand Schedules

Tabular representations showing the quantity of a good or service that consumers are willing and able to buy at various prices, over a specified period.

Surplus

In economics, the amount by which the quantity of a product exceeds the quantity demanded at a specific price.