Which of the following statements describes how step costs relate to fixed and variable costs?
A)A step cost behaves more like a variable cost as the step size decreases.
B)A step cost behaves more like a fixed cost as the step size decreases.
C)A step cost behaves like a variable cost, but not like a fixed cost.
D)A step cost behaves like a fixed cost, but not like a variable cost.

Question

Quizplus · Accepted Answer

Step costs behave more like variable costs as the step size decreases because they adjust more frequently with changes in activity level, similar to how variable costs change with the level of production or sales.

Which of the Following Statements Describes How Step Costs Relate