Within the Relevant Range, the Difference Between Variable Costs and Fixed

question 120

Multiple Choice

Within the relevant range, the difference between variable costs and fixed costs is:

• A) variable costs per unit fluctuate and fixed costs per unit remain constant.
• B) variable costs per unit are constant and fixed costs per unit fluctuate.
• C) both total variable costs and total fixed costs are constant.
• D) both total variable costs and total fixed costs fluctuate.

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Definitions:

Deadweight Loss

The decrease in economic effectiveness when a product or service fails to achieve or cannot attain its balance point.

Cheesecake

A sweet dessert consisting of one or more layers, primarily a thick layer of cream cheese and egg mixture set atop a base made from crushed cookies, crackers, or sponge cake.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market stability where there is no excess supply or demand.

Consumption Tax

A tax on the spending on goods and services purchased by consumers.