A Primary Difference Between Variable Costs and Fixed Costs Is

question 40

Multiple Choice

A primary difference between variable costs and fixed costs is:

• A) Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity.
• B) Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity.
• C) Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.
• D) Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range.
• E) Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

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Definitions:

Capital Goods

Large, durable goods used in the production of goods and services, such as machinery, buildings, and equipment.

Future Output

The estimated production or services to be provided by an economy, a sector, or a company in the future, often associated with planning and projections.

Consumption Goods

Goods that are used by consumers for personal or household purposes, intended to satisfy human wants or needs directly.

Time Preference

The tendency of individuals to value goods and experiences in the present more than in the future, influencing savings and investment decisions.