If a Firm Is About to Operate in an Environment

question 35

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) None of the above.