Which of the Following Statements Is NOT True

question 73

Multiple Choice

Which of the following statements is NOT true?

• A) In selecting an independent variable for cost behavior analysis, it is important to determine the activity that causes the cost being analyzed to occur.
• B) Professional judgment is very important in selecting an activity measure for a particular cost.
• C) A low correlation between two variables proves that one causes the other.
• D) The least-squares cost estimation method can be used to measure the linear function.

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Definitions:

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Collusion

A secret or illegal agreement or cooperation between parties to limit competition and manipulate prices or market conditions in their favor.

Allocative Efficiency

Refers to a situation in which the resources in an economy are distributed according to consumer preferences, ensuring that goods are produced in the quantities exactly matching consumer desires.

Unit Costs

Unit costs refer to the cost incurred to produce, store, or acquire one unit of a product or service.