A curvilinear relationship between variable costs and changes in activity levels suggests what?
A)A strictly linear relationship between fixed costs and activity levels is implausible.
B)A strictly curvilinear relationship between changes in activity levels and variable costs is possible only within the relevant range.
C)Since the relationship between activity levels and variable costs is linear within the relevant range and less linear at lower and higher levels outside the relevant range, the straight-line (linear)relationship takes on a curvature in the real world.
D)none of the above

Question

Quizplus · Accepted Answer

Within the relevant range, there is a linear relationship between activity levels and variable costs. However, outside the relevant range, this relationship becomes less linear, which results in a curvilinear relationship between variable costs and changes in activity levels. Therefore, the straight-line (linear) relationship takes on a curvature in the real world. A strictly linear relationship between fixed costs and activity levels is not related to this curvilinear relationship between variable costs and activity levels.

A Curvilinear Relationship Between Variable Costs and Changes in Activity