Whether a Cost Behaves as a Fixed Cost or as a Variable

question 44

Multiple Choice

Whether a cost behaves as a fixed cost or as a variable cost depends upon the:

• A) presence of fixed costs.
• B) cost structure of the company.
• C) industry.
• D) activity base used.

---

Definitions:

Reselling

The act of selling a product or service again, typically after buying it from the original seller.

Demand Elasticities

Various measures that quantify the sensitivity of demand for a good or service to changes in its price or other relevant factors.

Producing Cost

The total expense incurred in the creation of goods or services, including raw materials, labor, and overhead expenses.

Identical Preferences

The condition wherein all consumers or individuals prioritize goods, services, or outcomes in the same order, assuming homogeneity in tastes and desires.