For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?
A)the unemployment insurance premium that the firm pays to the state of Missouri that is calculated based on the number of worker-hours that the firm uses
B)the cost of the steel that is used in producing automobiles
C)the cost of the electricity of running the machines on the factory floor
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Variable costs change with the level of production. All the options listed (A, B, and C) are costs that vary with production levels, making them variable costs.

For a Large Firm That Produces and Sells Automobiles, Which