Worldatwork Exam c8 Topic 4 Question 81 Discussion

Actual exam question for Worldatwork's c8 exam

Question #: 81
Topic #: 4

[All c8 Questions]

What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?

AIt remains the same.

BIt decreases because variable costs are increasing.

CIt increases at the same rate as variable costs.

DIt becomes increasingly higher as revenues increase.

Show Suggested Answer

Suggested Answer: D

by Argelia at Sep 15, 2024, 01:33 AM

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Merri

7 months ago

Haha, this is a classic economics brain-teaser! I'm gonna go with C and say the marginal cost increases at the same rate as those variable costs. Hey, at least it's not as bad as dealing with hyperinflation, right?

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Lorean

6 months ago

Yeah, dealing with hyperinflation would definitely be worse!

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Belen

6 months ago

I'm going with C, it increases at the same rate as variable costs.

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Brandon

6 months ago

I think it remains the same.

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Josefa

7 months ago

Option D makes the most sense to me. As revenues increase, the marginal cost becomes higher and higher. Gotta love those fixed costs, am I right?

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Tonja

7 months ago

I'd go with B. The variable costs are going up, so the marginal cost has to come down. Simple as that.

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Lauran

6 months ago

True, D could be a possibility if revenues are increasing significantly. It's all about the balance between costs and revenue.

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Berry

6 months ago

But wouldn't it also depend on how much revenue is increasing? Maybe D could be a possibility too.

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Sherell

6 months ago

I agree, B makes sense. Variable costs going up means marginal cost should decrease.

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Anthony

7 months ago

Hmm, if revenue is accelerating slower than variable costs, that's gotta mean the marginal cost is gonna decrease. It's basic economics, folks!

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Chau

6 months ago

Exactly, it's all about that balance between revenue and costs.

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Georgiann

6 months ago

But fixed costs remain the same, so the marginal cost will decrease.

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Lucy

6 months ago

So, in this scenario, the marginal cost would likely remain the same.

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Laura

6 months ago

That's a good point, fixed costs do have an impact on the overall marginal cost.

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Shenika

7 months ago

A) It decreases because variable costs are increasing.

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Lyla

7 months ago

But wouldn't fixed costs remaining the same also play a role in keeping the marginal cost steady?

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Chanel

7 months ago

I think the marginal cost would decrease because revenue is not increasing as fast as variable costs.

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Jamal

7 months ago

But if revenue accelerates slower than variable costs, wouldn't that lead to a decrease in marginal cost?

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Chau

7 months ago

I disagree, I believe the answer is A) It remains the same.

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Jamal

7 months ago

I think the answer is B) It decreases because variable costs are increasing.

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