[amp_mcq option1=”Sunk costs” option2=”Multiplied by fixed costs” option3=”Costs that change with the level of production” option4=”Defined as the change in total cost resulting from the production of an additional unit of output” correct=”option3″]<\/p>\n
The correct answer is C. Variable costs are costs that change with the level of production. For example, the cost of raw materials used to produce a product is a variable cost, because it will increase as more products are produced.<\/p>\n
Option A is incorrect, because sunk costs are costs that have already been incurred and cannot be recovered. For example, the cost of purchasing a factory is a sunk cost, because it cannot be recovered even if the factory is no longer used.<\/p>\n
Option B is incorrect, because fixed costs are costs that do not change with the level of production. For example, the cost of rent for a factory is a fixed cost, because it will remain the same regardless of how many products are produced.<\/p>\n
Option D is incorrect, because marginal cost is the change in total cost resulting from the production of an additional unit of output. It is not a type of cost, but rather a measure of how costs change as production increases.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Sunk costs” option2=”Multiplied by fixed costs” option3=”Costs that change with the level of production” option4=”Defined as the change in total cost resulting from the production of an additional unit of output” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-45393","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n