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Which of the following costs remains constant within a relevant range of activity?Group of answer choicesvariable costsmixed costsfixed costsproduction costs

Question

Which of the following costs remains constant within a relevant range of activity?

Group of answer choices:

  • variable costs
  • mixed costs
  • fixed costs
  • production costs
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Solution

The cost that remains constant within a relevant range of activity is fixed costs.

Here's why:

  1. Variable costs: These costs change in direct proportion to the level of production or activity. For example, if you produce more goods, you'll need more raw materials, so your costs for raw materials (a variable cost) will increase.

  2. Mixed costs: These costs have both fixed and variable components. For example, a utility bill might have a fixed service charge plus a variable charge based on how much energy you use.

  3. Fixed costs: These costs do not change with the level of production or activity. They remain the same regardless of how much or how little you produce. Examples include rent, salaries, and insurance.

  4. Production costs: This is a broad category that includes all the costs involved in producing a good or service. It can include both variable and fixed costs.

So, the answer is fixed costs.

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