Which of the following statements is true?
A) Mixed costs are step costs.
B) Total variable cost change in direct proportion to changes in the amount of the activity.
C) In the short run,all cost are variable.
D) In the long run,all costs are fixed.

Question

Quizplus · Accepted Answer

Total variable costs change in direct proportion to changes in the amount of the activity, which means that as the activity increases or decreases, the total variable cost will increase or decrease in the same direction. Mixed costs can include both fixed and variable components and are not necessarily step costs. In the short run, some costs are fixed, such as rent or machinery purchases, while in the long run, all costs are variable as the business can adjust its production capacity. Therefore, options A, C, and D are incorrect.

Which of the Following Statements Is True