Which of the Following Statements Regarding Fixed Costs Is True

question 44

Multiple Choice

Which of the following statements regarding fixed costs is true?

• A) Fixed costs rise by a constant amount for every added unit of volume.
• B) While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.
• C) Fixed costs are those costs associated with direct labour and materials.
• D) Fixed costs equal variable costs at the break-even point.
• E) Fixed cost is the difference between selling price and variable cost.

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Definitions:

Collective Economics

Practices and principles that focus on the management and optimization of resources for the benefit of a community or group rather than individuals.

Public Choice Theory

A theory that applies economic principles to political science, analyzing how public decisions are made and their impact on society.

Economic Analysis

The systematic approach to determining the optimum use of scarce resources, involving comparison of two or more alternatives in achieving a specific objective under the given assumptions and constraints.

Voting Patterns

The tendencies and preferences displayed by voters when participating in political elections, often influenced by cultural, socioeconomic, and demographic factors.