Costs of production that change with the rate of output are
A)sunk costs.
B)opportunity costs.
C)fixed costs.
D)variable costs.

Question

Quizplus · Accepted Answer

Variable costs change with the change in the rate of output. For example, the cost of raw materials and labor needed to produce a certain number of units will increase as the production rate increases. Sunk costs (A) are costs that have already been incurred and cannot be changed. Opportunity costs (B) refer to the opportunity forgone in choosing one alternative over another. Fixed costs (C) are costs that remain constant regardless of the rate of output.

Costs of Production That Change with the Rate of Output