Which statement best describes a fixed cost within the relevant range?
A) It does not change in total as output changes.
B) It has both a variable and a fixed component.
C) It increases in total as level of activity increases.
D) It decreases in total as level of activity decreases.

Question

Quizplus · Accepted Answer

Fixed costs remain constant in total within the relevant range regardless of changes in the level of activity. This is because fixed costs do not vary with output or changes in the level of activity.

Which Statement Best Describes a Fixed Cost Within the Relevant