Select the Appropriate Cost Behaviour for the Following Costs Incurred

question 166

Multiple Choice

Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer.
-Cost of transporting bicycles to retailer

• A)Variable
• B)Fixed

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Definitions:

Purely Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and no single buyer or seller having any control over the market price.

Product Price

The sum of money needed to buy a specific product or service.

Wage Rate

The amount of compensation paid to employees for their labor per unit of time, often expressed per hour or year.

Substitution Effect

The economic principle that as prices rise (or incomes decrease), consumers will replace more expensive items with less costly alternatives.