Which of the following is NOT a correct statement concerning cost behavior?
A)According to economics, in the long run, all costs are variable.
B)Variable costs increase in total in relation to the activity driver.
C)Unit fixed costs increase or decrease inversely in relation to the activity driver.
D)None of the above

Question

Quizplus · Accepted Answer

All the statements provided are correct concerning cost behavior. Statement A is true because, in the long run, firms can adjust all inputs, making all costs variable. Statement B is accurate as variable costs do change in total with the level of activity. Statement C is also correct because as the level of activity increases, the fixed cost per unit decreases, and vice versa.

Which of the Following Is NOT a Correct Statement Concerning