If a Firm Is About to Operate in an Environment

question 27

Multiple Choice

If a firm is about to operate in an environment in which there will be a great deal of variability in the level of revenues, then the firm:

• A) should structure its cost structure to have high fixed costs and higher total variable costs.
• B) should structure its cost structure to have high fixed costs and consequently lower per unit variable costs.
• C) should structure its cost structure to have low fixed costs and consequently higher per unit variable costs.
• D) should leave the cost structure unchanged.

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Definitions:

Cultural Influence

The impact that a society's values, beliefs, and practices have on its members' behaviors, attitudes, and perceptions.

Stanford-Binet

An intelligence test that assesses cognitive abilities and IQ, originally developed by Alfred Binet and then expanded at Stanford University.

Cultural Influence

The effect that a society's values, norms, and practices have on the behavior and attitudes of its members.

Progressive Matrices

A type of IQ test that assesses non-verbal reasoning abilities through the use of abstract designs that participants must complete or solve.